Chinese tech giant Huawei has dumped its $60 million investment in research and development in Victoria, blaming the “current negative environment” and uncertainty surrounding recent Federal regulatory changes.
As debate intensifies in Australia over how to respond to the rise of China, Huawei quietly announced it would close its research and development centre in Burwood next month, with the loss of 15 highly specialised jobs.
The decision comes as Communications Minister Paul Fletcher last month ruled out lifting the ban on Huawei selling its 5G equipment in Australia on the basis of national security concerns.
The Chinese telco has invested $60 million in software at the Burwood centre, which is used in telecommunications networks in Australia and around the world.
“However due to the current negative environment and the uncertainty surrounding recent Federal regulatory changes, the business no longer feels confident investing further in the Australian research and development operations,” Huawei said in a letter to Victorian Trade Minister Martin Pakula.
China is Victoria’s top trading partner and Premier Daniel Andrews places special emphasis on the relationship, requiring every Cabinet minister to visit the country.
Last October Victoria became the only state in Australia to sign a memorandum of understanding with China to join the Belt and Road initiative, a trillion US dollar infrastructure program aimed at building and improving trade routes between China and other parts of the world.
Mr Pakula said it was regretful when any jobs were lost and it was disappointing that Huawei had made this decision.
“From Victoria’s perspective, we maintain a strong and growing relationship with China through mutually beneficial projects including the Belt and Road Initiative,” Mr Pakula said.
“This decision is a matter for Huawei, just as the Commonwealth Government’s engagement with China and Chinese companies is a matter for Canberra.”
Beijing has also recently criticised the Federal Assistance and Access Bill, passed late last year with the support of Labor, which gives security agencies and police access to encrypted telecommunications.
There are concerns that giving agencies backdoor access would weaken internet security.
However Huawei’s government and stakeholder relations manager Brent Hooley denied the new encryption law was the reason for the closure.
“The decision by Huawei headquarters is not based on one particular factor but a range of issues,” Mr Hooley said.
“All research and development investment decisions are taken on the overall market needs and the general investment environment.”
Mr Hooley said the other parts of the Australian business would be unaffected.
“We will continue to roll out 4G telecommunications equipment with Vodafone and Optus, our enterprise business (selling to corporations, health providers, miners, transport operators etc) will continue and our consumer business (smart phones, smart watches, tablets etc) will continue with strong investment.”
Huawei Australia Chairman John Lord has also criticised claims by Liberal MP Andrew Hastie last week that China poses a fundamental threat to Australia and the world has underestimated this threat in the same way it underestimated the threat of Nazi Germany.
Mr Lord said he was a little surprised that Mr Hastie who is the chairman of the parliamentary committee on intelligence and security would make statements like that “because Chairmen are meant to be unbiased”.
“China’s growing and that causes concerns among some people,” Mr Lord said. “We’ve been sucked up into the Cold War.”