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RED LINE
Malcolm Turnbull was troubled. The prime minister was considering banning Huawei, one of Chinaâs great companies and national champions, from the Australian continent. The telecommunications equipment maker also happened to be the biggest in the world in its industry, bigger than its US and Japanese rivals put together. Several countries had talked about banning it, but none had. The flagship company was to become an international acid test of nationsâ trust in China.
Australia was about to start building its 5G, or fifth generation, wifi network. Much more than a phone system with faster internet, 5G would enable the Internet of Things. Could Huawei be trusted to supply the countryâs central nervous system for a generation? Turnbull didnât think so. âOne thing you know â if the Chinese Communist Party called on Huawei to act against Australiaâs interests, it would have to do it,â he says in an interview with me. âHuawei says, âOh no, we would refuse.â Thatâs laughable. They would have no option but to comply.â
But the consequences of a ban? Turnbull knew that Beijing would seek to punish Australia. Of course, China allows no foreign firms to build its 5G network. But Beijing is not about reciprocity. Itâs about dominance. Xi Jinping had made it his personal mission to place Huawei at the centre of the global internet. He would later tell then US president Donald Trump that a ban on Huawei would âharm the overall bilateral relationshipâ, according to Trumpâs former national security adviser, John Bolton. It was a remarkable elevation. Xi was putting the interests of one Chinese company at the centre of the worldâs most consequential great-power relationship. It was, evidently, an extraordinary priority for China.
Turnbull sought a middle path. Was there a way to accept Huawei into the system and somehow manage the risk? Thatâs what Britain had done with Huawei in its 4G network. Turnbullâs history showed no inherent hostility to the Chinese company. When Julia Gillardâs Labor government banned Huawei in 2012 from supplying gear to the new National Broadband Network, Turnbull, as the shadow communications minister, promised to review the ban once in government. The Liberals ended up continuing Gillardâs ban. But now Huawei â and the Beijing government â was pressing to enter the next frontier.
Turnbull spent months researching, talking to Trump and other leaders in late 2017 and early 2018. He repeatedly turned to Australiaâs top-secret electronic spy agency, the Australian Signals Directorate â equivalent to the US National Security Agency â for an expert verdict. Turnbull says, âI went back and forth with Mike Burgess [then head of the directorate and now ASIOâs director-general of security], pressing him to find an effective means of mitigating the risk. I would have preferred to have all vendors available in Australia, but not at the expense of security.â Burgess did come up with some mitigation measures. He and the ASD experts compiled a spreadsheet filled with hundreds of them. âWe gave it a good red-hot go,â a senior intelligence official involved in the process told me in an interview. But there was a catch.
Turnbull, said the intelligence official, âis a big believer in tech. His starting point was, âConvince me that we canât manage the risks.â We worked extremely hard over eight, nine months, working it though.â The signals intelligence experts started from the proposition that Huawei equipment could be used in Australiaâs 5G network. They posed themselves the question: how can we manage that risk effectively?
Burgess gathered his professional hackers from the ASD and asked them to play the red team, to put themselves in Chinaâs shoes. They were âthe best and the brightestâ, said the official, drawn from the section that would be used to hack into networks overseas. They were told: âLetâs game it. Apply what we would do if we had a vendor that was working for us.â The telecommunications equipment vendor in question being Huawei, of course, the global leader in low-cost, high-grade telecoms gear.
A technologically sophisticated government already has the know-how to disrupt another countryâs 5G system. But if that government has sway over a 5G vendor in the country it wants to strike, explained the official, âyou can get there quicker from flash to bang, with zero cost of entryâ. It could be done with a simple instruction to the company operating in the target nationâs 5G system. And that would be a âserious problemâ for the target country.
Because it would bring down a network? Yes, but itâs more than that, said the senior Australian spy:
Hereâs the thing that most commentators get confused about with 5G, including some of our American friends. Itâs not about the interception of telephone calls. Weâve got that problem with 4G, we had it with 3G. Itâs not that 5G is just a faster mobile phone network. It has lower latency. [Itâs about] the speed at which boxes can talk to each other, and [at] higher density, so more devices can connect per square kilometre than ever before. Itâs machines talking to machines.
And if the 5G network stops working? âThe sewerage pump stops working. Clean water doesnât come to you. You can imagine the social implications of that. Or the public transport network doesnât work. Or electric cars that are self-driving donât work. And that has implications for society, implications for the economy.â For these reasons, the 5G network will be ânumber one on our critical infrastructure listâ in need of protection once itâs fully operational. Shutting down a 5G network at that point could throw the country into chaos.
So how would the Chinese government use Huawei to do such a thing? Putting himself in Beijingâs shoes, the intelligence officer said: âIf I want to understand how to break in, I donât have to break in. I just look at the blueprints â I understand the software, I know how it works. I know which engineering commands are there or what other commands are there for my purposes. That allows me to gain access, to switch things off, and that disrupts the country â elements of it, or the whole country. Thatâs why youâve got to be concerned.â
Turnbull steeped himself in the detail. The prime minister was âvery forensic in his questioning, he obviously did his own homeworkâ, related the senior spy. âBought himself a book on 5G security, I kid you not. We had to buy the book and make sure we understood it. It was a good grilling. [He] actually took us out for a spin.â The book, A Comprehensive Guide to 5G Security, is a dense, technical 474-page tome edited by experts in Finland, the US and Sweden.
As the Red Team of hackers worked through the risks, they compiled them in a spreadsheet. There were more than 300. Which meant that all 300-plus would need to be mitigated. Burgess and his staff brought the full compilation to Turnbull on big sheets of A3 paper and explained all the measures. They included having full and sole access to the source code, updates being done in Australia only, and full access to hardware schematics.
But even then, it would not be enough, they concluded. The devil was not only in the details â it was in the system design itself. And that was too hard to penetrate as outsiders. The senior intelligence officer explained: âItâs the control of the design that gives you zero cost of entry. Itâs a lot harder to reverse-engineer to find the malign element. As opposed to talking to the designers and saying â as well as its legitimate function â if I give you this secret handshake, that requires you to turn it off. You can get there the hard way through trying to reverse-engineer it, or you can get there the zero-cost way by talking to the person who knows how it works. Thatâs the differentiating factor.â
On this basis, 5G components designed in China and made in a factory in China would pose a bigger risk than 5G components assembled in a factory in China but designed by Nokia in Finland or Ericsson in Sweden. In other words, it came down to strategic trust. The Commonwealth of Australia could rely on the Republic of Finland, home to Nokia, and the Kingdom of Sweden, Ericssonâs domicile, but it could not trust the Peopleâs Republic of China to harbour only benign intentions.
What about simply limiting the deployment of Huaweiâs gear to less sensitive parts of the 5G network? This is exactly what Australia did with its 4G system. âHistorically, we have protected the sensitive information and functions at the core of our telecommunications networks by confining our high-risk vendors to the edge of our networks,â Burgess said in a 2018 speech. âBut the distinction between core and edge collapses in 5G networks. That means that a potential threat anywhere in the network will be a threat to the whole network.â Turnbull liked to summarise this in internal debates with the rhyme that âthe core is no moreâ. Burgessâs final advice to Turnbull and his National Security Committee was that the risk could not be mitigated.
Turnbull examined the question with his ministers and public service chiefs in the cabinetâs National Security Committee. If allowing Huawei into the system was a risk, a ban on it would carry risks of its own. Beijing had already damned Canberra for Turnbullâs laws against foreign interference and espionage by ending annual visits by Chinese leaders and freezing ministerial contacts. It already had an embargo on political contacts with Australia. Now Australia would be uniquely exposed to Beijingâs retribution if it were to be the first country in the world to designate Huawei as untouchable.
At this point, Peter Dutton intervened. The then Minister for Home Affairs had been involved in National Security Committee debates about Huawei over months, and he was growing concerned about Turnbullâs resolve. In a recent interview, Dutton says:
Australia had been in [an] appeasement phase for a long time. Weâd allowed dollars to cloud our judgment. We were on a knife edge, speaking frankly. Huawei was the tipping point. A number of us had pushed for years. The public was there [in supporting a tougher line], the advice to us and the intelligence was clear â why are we not responding?
I saw this as a momentous decision for the government because it would affect the wellbeing of the nation for a generation. 5G will control autonomous vehicles, it will be doing remote monitoring of medical devices. It would be unconscionable to allow it to be compromised.
Dutton approached the prime minister in the cabinet anteroom after a National Security Committee meeting on 27 June 2018, about six weeks before the government was due to make its final decision. âI said to him, âThis is a red line for me. We cannot allow Huawei into the network. I think the threat is only increasing, not mitigating.ââ It was a threat to resign from the Turnbull cabinet. And that made it a leadership issue. Australiaâs political class was feverish for a decade indulging the apparently addictive craze of dumping prime ministers at the first opportunity. Dutton was the favourite prime ministerial candidate from the conservative faction of the Liberal Party, and was preparing to strike at his leader. Turnbull might not have needed any extra pressure, but Dutton says he wanted to be sure. Says Dutton: âWhile Malcolm arrived at the right decision, I think he was leaning towards a mitigation approach.â
Turnbull had a different interpretation of their conversation. He recalled no mention of a âred lineâ nor any threat to resign. In a contemporaneous note in his diary provided to me, the then prime minister wrote: âDutton came to see me to say that he could not accept any involvement of Huawei or ZTE in the 5G network, much muttering of how we have to be strong in the face of China. I reminded him that I had initiated the whole 5G review, that I had raised it with the US in DC, not vice versa, and had discussed it with Mike Pence, the intelligence community and, of course, with Trump. I emphasised we needed to work through this carefully not least because we need to coordinate with the US. He seemed okay at the end.â Turnbull made no promises to Dutton, but the cabinetâs National Security Committee decided to ban Huawei on 14 August.
The decision was made, the line drawn, but not announced for nine days. Turnbull played it cautiously. Australian diplomats informed Beijing of the ban days before the announcement. Turnbull phoned Trump the day before: âWhen I told Trump, he seemed a bit surprised.â In the announcement itself, there was no mention of Huawei or of the smaller Chinese telecoms gear-maker ZTE, and no reference to China. Just a country-agnostic principle: Australia was now prohibiting âvendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian lawâ. To keep it low-key, there was no press conference, just the statement.
Peter Dutton resigned anyway. After the Huawei decision had been made but before it had been announced, Turnbull decided that Dutton was about to challenge him for the prime ministership. Turnbull pre-empted him by calling a spill motion in the Liberal party room, which he won. Dutton then resigned from the ministry while he gathered strength for another assault in three daysâ time. It was at this moment, the eye of the storm, that the Turnbull government announced the Huawei decision. But this weighty moment got scant notice in the Australian media, consumed by yet another spin of the revolving door. The announcement was made on 23 August 2018, Turnbullâs last full day as prime minister. He wasnât around for Beijingâs reaction.
Chinaâs foreign ministry said that it was âgravely concernedâ at Australiaâs âdiscriminatory measuresâ. Chinaâs commerce ministry called it âthe wrong decisionâ and warned of âa negative impact on the business interests of China and Australian companiesâ. In theatrical crescendo, the Communist Partyâs China Daily newspaper denounced the decision as âpoisonous to bilateral relationsâ and the Global Times said it was a âstab in the backâ for Huawei.
By this time, Scott Morrison had come through the middle to defeat both Turnbull and Dutton to take the prime ministership. Dutton was reinstated as home affairs minister. In the secrecy of Turnbullâs National Security Committee, Morrison as treasurer had teamed with Dutton to run the hardest line against Huawei. Dutton privately described Morrison as a âfellow travellerâ on this decision. Morrison himself claimed its paternity in an interview with me: âI issued the statementâ banning Huawei. âI was actually treasurer and acting Minister for Home Affairs at the time. It was actually my decision and my recommendation, along with Mitch Fifieldâ, the Minister for Communications. Morrison had joint carriage of the legislation because of the treasurerâs power over foreign investment, and Fifield because of his ministerial power over the telecommunications system. Of course, no cabinet decision is made without the endorsement of the prime minister. This is an example of the adage that success has many fathers, while failure is an orphan.
Australia was the first country to ban China from its 5G network, setting a precedent for others, including the US, Japan, India, New Zealand, Singapore, Denmark, Norway, the Czech Republic, Estonia, Poland and Vietnam. Britain had decided to accept Huawei, but then changed its mind in mid-2020. The Chinese-claimed island of Taiwan, which knows China more intimately than any other jurisdiction, also banned Huawei.
Most of these governments shut out Huawei by default rather than by declaration, achieving the same result but with less fanfare. Washington directed its noisy belligerence to Beijing, but Japan, New Zealand, Norway, Singapore and Vietnam appeared to merely choose other companies by chance, and India said nothing officially but circulated an internal direction to all government ministries to exclude Huawei from any tenders. These countries hoped to be less obvious targets for Xi Jinpingâs retaliation. Sweden was more direct. Itâs Post and Telecom Authority announced in October 2020 that it would ban Huawei and ZTE because the âinfluence of Chinaâs one-party state over the countryâs private sector brings with it strong incentives for privately owned companies to act in accordance with state goals and the communist partyâs national strategiesâ.
Australia had some evidence for its decision. The Chinese Communist Party enacted the National Intelligence Law of 2017. This law unequivocally requires that âany organisation or citizen shall support, assist and cooperate with state intelligence workâ and aid the national intelligence agencies to âcarry out intelligence work at home and abroadâ. The weight of evidence only increased after the Turnbull governmentâs announcement. Beijing has now taken further measures to co-opt Chinaâs private sector. By the end of 2018 more than 90 per cent of private businesses in China had established internal CCP cells to guide and monitor them, according to Beijingâs official tally. And in 2020 Xi Jinping announced a policy that obliged private businesses to work with the partyâs United Front Work Department, which is responsible for mobilising Chinese populations abroad to serve Beijingâs interests. Private companies are required to âunswervingly listen to and follow the steps of the partyâ. Each of these measures explicitly adheres to the all-encompassing principle that Xi enshrined in the partyâs constitution in 2017: âGovernment, the military, society and schools, north, south, east and west â the party leads them all.â
In this way the minutiae of Australian security and politics intersected with the great global geopolitics of our time. Morrison and Dutton now regrouped to prosecute Australiaâs resistance to the Chinese Communist Partyâs drive for dominance. And to brace for Xiâs vengeance.
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