The big news is no news at all

Daphne Caruana Galizia Thursday, 16 July 2015, 11:48 Last update: about 12 years ago

The big news this week is that the Chinese telecoms corporation Huawei is “investing” in Malta. But you need only have read the lines themselves, rather than read between them, to know that this is not investment at all – not in the sense that it will translate into export or GDP growth, or even create employment. This is not investment in Malta but research and development expenditure by Huawai, only a fraction of which will actually be spent in Malta or stay in Malta.

Having to explain things in simplistic terms doesn’t feel right, but I’ve reached the point where I am forced to admit that it is the only way. If the government is able to turn the opening of a tiny research office by a blacklisted Chinese company into a major media circus and impress the many gullible and uninformed people out there, then yes, I have to conclude that simplistic explanations are not offensive but downright essential.

So here goes. Huawei will not be making anything in Malta and selling it outside Malta. Nor will it be providing services or anything else in the high-value-added category that will be billed to customers and clients outside Malta, building up Malta’s export figures. No. Huawei has transferred around 10 Chinese employees from elsewhere in its organisation to a small office in Malta (at Smart City). Instead of working wherever else they worked before for Huawei, they will be working for Huawei in Malta. This means that Huawei hasn’t even increased its payroll bill.

Never mind, I hear you say, it will be paying rent for its office at Smart City. Aside from the fact that rent for a small office is a negligible contribution to the country’s economy, does not constitute ‘investment’ and certainly does not warrant a big media circus, we don’t even know that for a fact. For all we know, Huawei may have been given that Smart City office for free or for next to nothing, not at commercial rates, purely as a sweetener.

But the Chinese employees will be paying rent, right? No, not necessarily. Chinese employment practices are not European employment practices, and Chinese employers commit gross abuses even when they operate within the European Union. Malta has the experience of Leisure Clothing by way of example. Leisure Clothing is not just any random Chinese company. It is directly and wholly owned by the Chinese state itself. Its Chinese employees are housed in substandard barracks and confined to them most of the time when they are not working. I would not be surprised to discover that Huawei’s 10 Chinese employees will all live in the same substandard flat, and they might even be obliged to sleep and live in the office itself.

All right, so Huawei will not be making products in Malta and selling them overseas, or billing overseas clients for services provided through the Malta office. It will be testing 5G, which is classed as R&D, or research and development. But surely it will spend some money in Malta doing that? Yes, but relatively little. And the money it spends testing 5G does not constitute investment in terms of the Maltese economy because it will do nothing to help the Maltese economy grow or to generate more jobs or export revenue.

Huawei said at the press conference that it “does not exclude employing one Maltese person”. Yes, it did say that. I think it incredibly offensive and patronising. Don’t you? A Chinese mega-corporation comes over to a European Union member state and offers the possibility – the possibility, not even the reality – of a single job to a citizen of that country, and the prime minister of that country bows and scrapes and makes a song and dance about it like a grateful Tahitian chieftain presented with glass beads by Captain Cook and his men.

Except that the prime minister isn’t really grateful and impressed. He may be many things, but he’s not that stupid and uninformed. He knows that the situation is exactly as I have described here, and just as I do, he knows that many people don’t read beyond the headline and speak about ‘investing’ in a good handbag or winter coat. It just so happened that Sai Mizzi Liang has brought her children to Malta for the summer holidays to see their father and grandparents – hence the sudden and concentrated spate of appearances – so he will have considered this to be a good time to dampen down criticism of her salary and non-performance with a big show about a small office employing 10 Chinese people who were already on the Huawei payroll. Muscat isn’t anything if not cynical in his manipulation of popular ignorance. In this, if in nothing else bar the relentless cupidity and money-grubbing, he is Dom Mintoff’s dedicated disciple.

All this, and I haven’t even begun on the fact that Huawei is blacklisted by many countries in the developed and developing world, barred from state tenders because of a range of reasons that include corruption of public officials, donations to ruling parties in exchange for favours, and espionage. In sum, that press conference the day before yesterday was nothing short of embarrassing. Parts of the electorate will have been impressed, but embassies will be logging the facts for what they are and reporting back to base accordingly. Muscat thinks that doesn’t count because it doesn’t translate into votes or the loss of votes, but counts it most certainly does – in areas which he seems reluctant to try to understand.