Can Australia Trust Chinese Companies?

How do you know if you’re living in a dystopian society?

They’re easy to recognise if you’re looking from the outside in. You can watch in disbelief as freedom after freedom is ripped away from the general public — all the while incredulously asking yourself why they don’t fight back.

But much like a frog in boiling water, it can be difficult to identify hell when you’re in it. Particularly when it’s been that way for centuries.

However, if you ask me, a good indicator is not being allowed to use the word ‘dystopia’ itself.

As we all know, the media in China is a tightly controlled, highly censored mouthpiece for the Chinese Communist Party. And when the language of dissent has been eradicated, it’s almost impossible to fight back.

When it comes to freedom of speech, the Chinese people have their hands tied, eyes blindfolded and mouths taped. They can express nothing but love for the Party, as any inkling of opposition will be swiftly crushed by the many ‘internet minders’ who set the parameters of national debate.

As a result, words have been completely wiped from vocabularies, and memories have been seared from the national psyche.

In China, books are burned electronically.  You can no longer mention the novels Brave New World, Animal Farm or 1984 online. Nor can you utter the author’s names, or discuss the messages conveyed in their work.

And you can forget about mentioning the Tiananmen Square Massacre, questioning or criticising any party decisions, or daring to have an opinion of the president that strays from aggressively positive.

The growing despair can’t even be relieved through humour. Winnie the Pooh — the fat yellow bear who was used as a code to mock President Xi Jinping on social media sites like Weibo — was quickly banned from being used once officials caught on to the gag.

As exiled Egyptian TV-show host, Bassem Youssef, aptly observes: ‘If your regime can’t handle a joke, you don’t have a regime.’

In perhaps what is the peak of government control, this is the message you will get if you attempt to type the word ‘disagree’ into Weibo:

Sorry, this content violates the laws and regulations of Weibo’s terms of service.

A nation with such a dreadful reputation for freedom of speech probably isn’t one we want controlling our telecom network. Nor is it xenophobic to say so.

But after the barrage of insults hurled at our government, it’s clear China doesn’t see it that way.

A week of stolen power

In his first defining decision as prime minister, Scott Morrison effectively banned Chinese Telcos Huawei and ZTE from providing the 5G mobile network in Australia.

Huawei Australia chairman John Lord believes prejudice is to blame, stating:

It [xenophobia] is not allowing an open debate about how we embrace these new innovations and technologies so that Australia gets the best innovation and technology.’

China’s ministry of commerce has also stated that Australia has made a ‘wrong decision’ in backing out from the deal. While popular Chinese newspaper Global Times implied that the decision had malicious intent behind it:

Those who willfully hurt Chinese companies with an excuse of national security will meet their nemesis.’

These insults come after Scott Morrison and Communications Minister Mitch Fifield deemed the risks of allowing Huawei to control the 5G network too great. This is a decision that had previously been made in 2012, when Huawei was banned from supplying technology to the NBN due to national security concerns.

The federal government was, and still is, concerned about a Chinese national security law which requires all companies to work with intelligence agencies when ordered. Because when it comes to the communist party, there’s no question that they’re the ones really in control.

Other Chinese tabloids have also suggested that there is a link between the US’s trade war with China and Morrison’s decision. The US has been taking steps to ban Huawei for a while now, and in May the Pentagon ordered all retail outlets on US military bases to cease selling Huawei and ZTE phones.

No doubt Morrison’s decision was made after considering all of these factors. But whatever the reason, it was a wise decision to make.

Australia has a long standing tradition of joking about parliament. Nothing is off limits, and we routinely take our insults too far.

Last week you could have turned to any TV station, radio channel or social media site and witnessed the public and our figureheads shamelessly mocking the government. These are insults that are not only entertaining to watch, but are vital for our democracy to thrive.

So while the decision to ban Huawei isn’t great for Australia-China relations, it’s a step in the right direction for the security of our nation. If we want to keep freely insulting, joking and using the word ‘disagree’ without a foreign government listening in — it’s best to keep Chinese companies far away from our telephones.

This week in Markets & Money:

The financial industry wants you to believe the market will continue to rise. But as Vern wrote on Monday, that’s fake news. History suggests that there’s a strong case for the markets being on the verge of a downturn. And if you want to protect yourself as an investor, now is the time to start preparing…

To learn more, click here.

Investors are sometimes blindsided by the worries of the market. And as a result, they often miss great opportunities. But as Terence wrote on Tuesday, if you want to understand what’s going on, don’t listen to analysts or economists. You should stop reading opinions, and learn to read the charts instead…

To learn more, click here.

Gold collapsed below US$1,200 last week. That shocked multiple commentators who are even more bullish on gold now. And as Jason wrote on Wednesday, gold could be setting up for history’s largest slingshot into December.

To read the full story, click here.

Then on Thursday, Matt covered the basics of trading options. He spoke about perceived risks, how to navigate through the jargon, and most importantly, how to take advantage of this style of trading.

If you’re considering trading options, click here.

Is the next Great Depression looming? Vern believes so. With debt piling up, interest rates at record lows and a history of credit-fuelled consumption chasing us, we could be in for a shock very soon.

To read the full story, click here.

Until next week,

Katie Johnson,

Editor, Markets & Money

Revealed: Harry Dent’s warning to Australians. Download the free report now. Are You Prepared for an Aussie Housing Collapse? Find Out Before It’s too Late

Markets & Money is unlike any other finance newsletter. Our mission is to look at the world of investments and finance in a sceptical and contrarian way. Our editorial team looks beyond the headlines and obvious explanations to bring you what we think is really moving the market. More importantly, we’re trying to show you where the next big opportunities and where the big risks are that you might not be aware of. In Markets & Money you’ll read about the state of the Australian housing market, the future of the commodity boom, China’s rise to an economic superpower, the fate of the US dollar, and of course a whole lot more.

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