Tech

Australia is trying to thwart China by investing in a mobile network in the Pacific

The Australian Government plans to fund most of the acquisition of mobile networks in six Pacific countries. This is to prevent China from buying strategically important assets, according to foreign policy experts.

Telstra Co., Ltd.

Australia’s largest telecommunications provider said Monday that it is considering buying mobile networks in Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu, and that the Australian government will help pay for the acquisition. The network, now owned by the Jamaica-based Digicel Group, is adjacent to a submarine cable that carries communications between Australia and its neighbors.

The deal will be the latest move by the Australian Government to limit China’s influence in the region, especially in the telecommunications sector. Australia is the Chinese telecommunications company Huawei Technologies Co. Banned from being involved in 5G mobile networks. In 2018, Australia announced that it would build an undersea high-speed internet cable to the Solomon Islands and keep Huawei out of the project. And recently, for safety reasons, Australia has begun reviewing port leases by a Chinese company in the northern Australian city of Darwin.

Telstra said it was uncertain whether the deal would proceed.

The company, which was owned by the Australian government until 1997, has recently focused on selling assets and would not have considered buying the Pacific without the government’s request, a person familiar with the matter said. Telstra has been in talks with Digicel for a few weeks, he said.

Australia’s Ministry of Foreign Affairs and Trade said the government would, where appropriate, support Australian companies investing in Pacific infrastructure. The Australian Embassy in China did not respond to requests for comment. We couldn’t reach the representative of Digicel, who is struggling financially in the Covid-19 pandemic.

Tensions between Australia and China have intensified since last year when Australian Prime Minister Scott Morrison supported calls for an investigation into the origin of the Covid-19 pandemic. Since then, China has imposed tariffs or other restrictions on Australian products such as coal, wine, wool and cotton.

Under Morrison, Australia’s centre-right government has sought to deepen its ties with its historic ally, the United States, but Australia is increasingly dependent on China for economic well-being. Thinking about it, it was a delicate balance. China bought much of Australia’s iron ore, and Chinese students and tourists flocked to Australia before the coronavirus pandemic closed its borders.

John Lee, a senior researcher at the University of Sydney’s Center for the City of Sydney, said Australia’s move to leave China as a potential buyer was driven by security concerns. If China acquires the Pacific mobile network, it could monitor Australia’s communications to and from the region and use asset management as leverage, he said.

“It’s almost game over when it comes to eliminating or minimizing China’s impact on these developing economies,” said Dr. Lee, an adviser to Australia’s former Foreign Minister Julie Bishop from 2016 to 2018. Said. It focuses on the South Pacific and imposes constraints on China’s influence in particular. “

Australian investment may be the first time after granting new authority to export credit agencies to fund transactions that serve national interests. The Australian Trade Minister announced the bill last month, but parliamentary debate is not yet planned.

For Telstra, the deal will be an opportunity to work with the government during potential privatization of Australia’s broadband networks. Telstra has recently been rebuilt to allow bidding.

“It’s a good time for Telstra to benefit the federal government. The favor is back,” said Jonathan Pryke, director of the Pacific Islands at the Lowy Institute, a Sydney think tank.

Write to Stuart Condie (stuart.condie@wsj.com)

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Australia is trying to thwart China by investing in a mobile network in the Pacific

Source link Australia is trying to thwart China by investing in a mobile network in the Pacific

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