Huawei appears to cut research funding in Australia

Huawei appears to be cutting research funding in Australia as it continues to face problems in the country over national security fears.

The company’s Australian financial reports show a drop in research spending from $81,000 in 2016 to zero last year. For comparison, back in 2015, the company spent $8.3 million – and $10.1 million the year before that.

The company denies any reduction in research spending.

A spokesman for Huawei said it’s provided more than $1 million of IoT equipment to James Cook University in Cairns and spent $6 million on a new innovation centre at the company’s Sydney head office.

Jeremy Mitchell, Huawei Australia Corporate Affairs Director, told Fairfax Media: “Any local research expenses are also charged back to head office – so the local reported amount should be zero or close to zero.”

In other words, the company says its research spending is being diverted to its headquarters in China.

While this is a fairly standard practice undertaken by many companies, it will not help to quell the fears of some ministers and security agencies that Huawei is linked to the Chinese government.

Ongoing Security Concerns

Telecoms first reported on Huawei’s problems in Australia last month when Labor MP Michael Danby called for a ban on buying 5G network equipment from Chinese firms citing national security concerns.

“Huawei and ZTE must report to a communist party cell at the top of their organisations,” he warned. “Let me issue a clarion call to this parliament, to the media and to the Australian public: Australia’s 5G network must not be sold to these telcos.”

The companies have denied Chinese government links but remain scrutinised by governments including Australia, the United States, and the United Kingdom.

Huawei cooperates with security agency GCHQ in the UK at a dedicated centre to have its equipment checked before use in the nation’s infrastructure.

In a 2012 speech, Huawei Australia Chairman John Lord floated the idea of a similar centre being established in the country:

"In the age of globalisation, no country has the ability to sustain its own isolated ICT industry, indeed no country should. All countries must also develop security assurance frameworks to effectively analyse technology products which are globally sourced.

Countries like the UK have already taken this vital step, and others must follow."

Earlier this month, Lord expanded on those comments speaking to Radio National’s Breakfast program:

“We believe that all telcos should be open, and equipment should be checked.

We build equipment on the supposition that nations or companies or rogues will try and crack your equipment.”

Australian PM Malcolm Turnbull previously barred Huawei from bidding for the National Broadband Network (NBN) during his tenure as communications minister. Danby called on Turnbull in Parliament to take a similar approach with 5G.

What are your thoughts on Huawei’s ongoing problems in Australia? Let us know in the comments.

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