Pushed out of Australian telecom infra, Huawei ends sponsorship for sporting league
01 September, 2020
Chinese telecom giant Huawei is ending its oldest major sporting sponsorship deal, saying Monday it had been breaking its contract with an Australian rugby league team after nine years as a result of a “great trade war” between China and Australia.
Australia has barred the world’s major maker of switching gear and major smartphone brand from involvement in crucial national communication infrastructure recently, while China has ratcheted up pressure for an Australian policy reversal.
“Unfortunately as everyone knows, Huawei has been caught in the center of an excellent trade war and the consequences on our business is higher than we expected,” Huawei Australia’s chief corporate affairs officer Jeremy Mitchell told reporters.
Huawei will end its current financial backing of the Canberra Raiders by the end of the existing National Rugby League season, as a result of the “negative business environment” in Australia, Mitchell said. The grand final is on October 25.
Huawei will continue among the minor sponsors, as the team looks for an upgraded major sponsor.
“We would’ve loved to have stayed for another nine years or a decade, but the business environment in Australia is quite hard for a Chinese company,” Mitchell said.
The Raiders may be the only team in the national competition located in the Australian capital, the guts of government and national policy-making.
Last year, Huawei had renewed its sponsorship deal for just two years before end of the 2021 season.
Huawei’s landmark decision to sponsor the team in 2012 came months following the government banned the business on security grounds from involvement in the rollout of Australia’s National Broadband Network in 2011.
The sponsorship was viewed as an attempt to boost Huawei’s public image in the eyes of lawmakers and senior bureaucrats who barrack for the Canberra team.
Raiders board member Dennis Richardson, a former head of the Defence Department and of the main domestic spy agency, Australian Security Intelligence Organisation, have been a vocal supporter of Huawei’s sponsorship deal.
Mitchell said the government’s decision in 2018 to ban Huawei from Australia’s 5G networks had had a major economic impact.
Huawei would consider renewing its sponsorship partnership with the Raiders “if the business enterprise environment changes for us” in Australia, he said.
“The truth is we’ve gone from 1,000 staff. Next year we’ll be 100 staff. The impact of the 5G ban and the greater Australia-China relationship has already established an enormous flow-on effect,” Mitchell said.
“Where we had hoped our business would pick up outside of the 5G hasn’t happened,” he added.
Raiders leader Don Furner said the team was “very sad” to be losing its major sponsor. Neither Huawei nor the team has ever made public the value of the sponsorship.
“The Canberra Raiders and Huawei have enjoyed a fantastic partnership for nearly ten years - they have already been by far our longest serving major sponsor,” Furner said.
China has made Australia lifting its ban on Huawei on essential infrastructure a condition of turning around strained bilateral relations. The diplomatic relationship has since worsened because Australia needed an independent inquiry in to the origins of and international responses to the coronavirus pandemic.
China has blocked exports of Australian barley and beef in recent months. China in addition has begun a study into whether Australia has breached trade rules by selling wine at inappropriately low prices on the Chinese market, an allegation that Australia rejects.
Australia has annoyed China by vetoing the $430 million sale of an Australia-based diary business owned by Japan’s Kirin Holdings Co. to Chinese company China Mengniu Dairy Co.
Australia maintains it generally does not want a trade war with China, its most significant trading partner.
“Australia is certainly not engaging in any kind of war,” Trade Minister Simon Birmingham said recently. “What we want is a constructive trading relationship, one where we can interact in the regions of mutual interest.”
Mitchell said the decision to end the Raiders’ sponsorship was solely due to Australian, instead of global, business conditions.
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