China lowers AU telecoms prices: Downer


Former foreign affairs minister and Huawei non-executive director Alexander Downer has warned the government not to turn its back on China and its technology companies, stating that China is keeping telecoms technology prices lower.
Last month, it was revealed that the government had banned Huawei from winning tenders for the National Broadband Network (NBN) on the advice of the Australian Security Intelligence Organisation (ASIO). It has been speculated that the ban was associated with the fact that Huawei's president Ren Zhengfei is a retired major of the Chinese People's Liberation Army.
Speaking at the Communications Day 2012 Summit in Sydney this morning, the former foreign affairs minister, who was appointed to the director role in Huawei last year, said that during his time in the Howard government, he had sought to foster Sino-Australian relations, but that the current Gillard government has moved away from this.
"The catchcry of Australian foreign and international economic policy has been engagement with Asia. I must say to you, I don't hear that language much anymore. I'm not sure this country is quite so focused on engagement with Asia as it has been in the past, and I think that is an enormous mistake," he said.
He said that it is also a mistake to believe that communist China is like the former communist Soviet Union, in wanting to export its political beliefs. Instead, he said that the Australian telecommunications industry has a lot to thank China for, with telecommunications prices declining over the last few years in stark contrast to the rise of the consumer price index.
"Without China, the costs of our telecommunications would be very much higher than they are," he said. "One of the reasons we have affordable telecommunications is that it is imported from China."
He pointed to Huawei being the top applicant for patents in 2008, and said that if Australia closes itself off to China for investment, it would also close itself off from these new technological developments.
"Huawei spends 10 per cent of its revenues on research and development, and 45 per cent of its employees are involved in research and development," he said. "China isn't just a place where labour is cheap. China is importantly increasingly becoming a source of intellectual property.
"[China has a] reputation for stealing intellectual property, but in recent times China itself has become one of the great bastions in the world of research and development," he added.
Downer said that if Australia wants to be an open economy, then it is important that Chinese corporations be allowed to invest in Australia, and Australia needs to "transmit the right sort of message".
"Not to be transmitting a message that somehow we are paranoid about Chinese investment, but it's all well and good for a range of other countries to invest in our country."
He said that Australia has to have a different relationship with China than other Western countries, because of Australia's location in the Asia-Pacific region, and to treat China as an enemy would be disengaging with our region.
"The rise of China [is] the great geopolitical change of your lifetime," he said. "The challenge for Australia is how are we going to manage this change?"
Downer said that Huawei has just accepted the government's decision on the NBN tender ban and has moved on, but he stressed that Huawei is different from other Chinese companies in that it is not owned by the Chinese Government, with shares in the company held by its employees.
"One of the things that interested me about Huawei is that it is a private company, and it is part of a new China, a new Chinese economic model where you're getting private companies in direct competition with state-owned enterprises."


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