A new Sino-Russian high-tech partnership

Authoritarian innovation in an era of great-power rivalry

What’s the problem?

Sino-Russian relations have been adapting to an era of great-power rivalry. This complex relationship, categorised as a ‘comprehensive strategic partnership of coordination for a new era’, has continued to evolve as global strategic competition has intensified.1 China and Russia have not only expanded military cooperation but are also undertaking more extensive technological cooperation, including in fifth-generation telecommunications, artificial intelligence (AI), biotechnology and the digital economy.

When Russia and China commemorated the 70th anniversary of the establishment of diplomatic relations between Soviet Union and the People’s Republic of China in October 2019,2 the celebrations highlighted the history of this ‘friendship’ and a positive agenda for contemporary partnership that is pursuing bilateral security, ‘the spirit of innovation’, and ‘cooperation in all areas’.3

Such partnerships show that Beijing and Moscow recognise the potential synergies of joining forces in the development of these dual-use technologies, which possess clear military and commercial significance. This distinct deepening of China–Russia technological collaborations is also a response to increased pressures imposed by the US. Over the past couple of years, US policy has sought to limit Chinese and Russian engagements with the global technological ecosystem, including through sanctions and export controls. Under these geopolitical circumstances, the determination of Chinese and Russian leaders to develop indigenous replacements for foreign, particularly American technologies, from chips to operating systems, has provided further motivation for cooperation.

These advances in authoritarian innovation should provoke concerns for democracies for reasons of security, human rights, and overall competitiveness. Notably, the Chinese and Russian governments are also cooperating on techniques for improved censorship and surveillance and increasingly coordinating on approaches to governance that justify and promote their preferred approach of cyber sovereignty and internet management, to other countries and through international standards and other institutions. Today’s trends in technological collaboration and competition also possess strategic and ideological implications for great-power rivalry.

What’s the solution?

This paper is intended to start an initial mapping and exploration of the expanding cooperative ecosystem involving Moscow and Beijing.4 It will be important to track the trajectory and assess the implications of these Sino-Russian technological collaborations, given the risks and threats that could result from those advances. In a world of globalised innovation, the diffusion of even the most sensitive and strategic technologies, particularly those that are dual-use in nature and driven by commercial developments, will remain inherently challenging to constrain but essential to understand and anticipate.

  • To avoid strategic surprise, it’s important to assess and anticipate these technological advancements by potential adversaries. Like-minded democracies that are concerned about the capabilities of these authoritarian regimes should monitor and evaluate the potential implications of these continuing developments.
  • The US and Australia, along with allies and partners, should monitor and mitigate tech transfer and collaborative research activities that can involve intellectual property (IP) theft and extra-legal activities, including through expanding information-sharing mechanisms. This collaboration should include coordinating on export controls, screening of investments, and restrictions against collaboration with military-linked or otherwise problematic institutions in China and Russia.
  • It’s critical to continue to deepen cooperation and coordination on policy responses to the challenges and opportunities that emerging technologies present. For instance, improvements in sharing data among allies and partners within and beyond the Five Eyes nations could be conducive to advancing the future development of AI in a manner that’s consistent with our ethics and values.
  • Today, like-minded democracies must recognise the threats from advances in and the diffusion of technologies that can be used to empower autocratic regimes. For that reason, it will be vital to mount a more unified response to promulgate norms for the use of next-generation technologies, particularly AI and biotech.

Background: Cold War antecedents to contemporary military-technological cooperation

The history of Sino-Russian technological cooperation can be traced back to the early years of the Cold War. The large-scale assistance provided by the Soviet Union to China in the 1950s involved supplying equipment, technology and expertise for Chinese enterprises, including thousands of highly qualified Soviet specialists working across China.5 Sino-Russian scientific and technical cooperation, ranging from the education of Chinese students in the Soviet Union to joint research and the transfer of scientific information, contributed to China’s development of its own industrial, scientific and technical foundations. Initially, China’s defence industry benefited greatly from the availability of Soviet technology and armaments, which were later reverse-engineered and indigenised. The Sino-Soviet split that started in the late 1950s and lasted through the 1970s interrupted those efforts, which didn’t resume at scale until after the end of the Cold War.6

Russia’s arms sales to China have since recovered to high levels, and China remains fairly reliant upon certain Russian defense technologies. This is exemplified by China’s recent acquisition of the S-400 advanced air defence system,7 for which China’s Central Military Commission Equipment Development Department was sanctioned by the US.8 Traditionally, China has also looked to Russia for access to aero-engines.9 Today, China’s tech sector and defence industry have surpassed Russia in certain sectors and technologies. For instance, China has developed unmanned aerial vehicles (UAVs) that are far more advanced than those currently operational in Russia.10 Nonetheless, the Russian military has been unwilling to acquire Chinese UAVs, instead deciding to attempt to develop indigenous counterparts in mid-range and heavy unmanned combat models.11 Nonetheless, for Russia, nearto mid-term access to certain Chinese products, services and experience may become the very lifeline that Russia’s industry, government and military will require in order to wean themselves off high-tech imports12, although even that approach may be challenged by limited availability of Chinese components.13

Underscoring the apparent strength of this evolving relationship, China and Russia have recently elevated their military-to-military relationship. In September 2019, the Russian and Chinese defence ministers agreed to sign official documents to jointly pursue military and military–technical cooperation.14 According to the Russian Defence Minister, ‘the results of the [bilateral] meeting will serve the further development of a comprehensive strategic partnership between Russia and China.’15

Reportedly, Russia plans to aid China in developing a missile defense warning system, according to remarks by President Putin in October 2019.16 At the moment, only the United States and Russian Federation have fully operationalized such technology, and according to Moscow, sharing this technology with Beijing could ‘cardinally increase China’s defense capability’.17 For China, access to Russian lessons learned in new conflicts such as Syria may prove extremely valuable as Beijing digests key data and lessons.18 Of course, this technological cooperation has also extended into joint exercises, including joint air patrols and naval drills.19

A strategic partnership for technological advancement

The strategic partnership between China and Russia has increasingly concentrated on technology and innovation.20 Starting with the state visit of Xi Jinping to Moscow in May 2015, in particular, the Chinese and Russian governments have signed a series of new agreements that concentrate on expanding into new realms of cooperation, including the digital economy.21 In June 2016, China’s Ministry of Science and Technology and Russia’s Ministry of Economic Development signed the ‘Memorandum of Understanding on Launching Cooperation in the Domain of Innovation’.22 With the elevation of the China–Russia relationship as a ‘comprehensive strategic partnership of coordination for a new era’, the notion of these nations as being linked in a ‘science and technology cooperation partnership for shared innovation’ (作共同创新的科技合作伙伴) has been elevated as one of the major pillars of this relationship.23

To some degree, this designation has been primarily rhetorical and symbolic, but it has also corresponded with progress and greater substance over time. The Chinese and Russian governments have launched a number of new forums and mechanisms that are intended to promote deeper collaboration, including fostering joint projects and partnerships among companies. Over time, the Sino-Russian partnership has become more and more institutionalised.24 This policy support for collaboration in innovation has manifested in active initiatives that are just starting to take shape.

This section outlines five areas where the Sino-Russian relationship is deepening, including in dialogues and exchanges, the development of industrial science and technology (S&T) parks, and the expansion of academic cooperation.

Dialogues and exchanges

Concurrently, a growing number of dialogues between Chinese and Russian governments and departments have attempted to promote exchanges and partnerships, and those engagements have also become particularly prominent since 2016. While the initiatives listed below remain relatively nascent, these new mechanisms constitute a network of science, technology, engineering and mathematics (STEM) cooperation that could continue to expand in the years to come and provide the two countries with new vehicles for engagement and information sharing across their respective scientific communities.

  • Starting in 2016, the Russian–Chinese High-Tech Forum has been convened annually. During the 2017 forum, both sides worked on the creation of direct and open dialogue between tech investors of Russia and China, as well as on the expansion and diversification of cooperation in the field of innovations and high technologies.25 During the 2018 forum, proposed initiatives for expanded cooperation included the introduction of new information technologies. This forum wasn’t merely a symbolic indication of interest in cooperation but appeared to produce concrete results, including the signing of a number of bilateral agreements.26 In particular, the Novosibirsk State University of Architecture and Civil Engineering signed an agreement with Chinese partners on the development of technologies for construction and operation in cold conditions.27 The specific projects featured included China’s accession to the Russian project of a synchrotron accelerator.28
  • Beginning in 2017, the Sino-Russian Innovation Dialogue has been convened annually by China’s Ministry of Science and Technology and Russia’s Ministry of Economic Development.29 In the first dialogue, in Beijing, more than 100 Chinese and Russian enterprises participated, from industries that included biomedicine, nanotechnology, new materials, robotics, drones and AI, showcasing their innovative technologies and concluding new agreements for cooperation. During the second dialogue, in Moscow, the Russian and Chinese governments determined the 2019–2024 China–Russia Innovation Cooperation Work Plan.30 Each country regards the plan as an opportunity for its own development, as it combines the advantages of China’s industry, capital and market with the resources, technology and talents of Russia.31 Contemporaneously, forums have been convened in parallel on ‘Investing in Innovations’ and have brought together prominent investors and entrepreneurs.32 When the third dialogue was convened in Shanghai in September 2019, the agenda included a competition in innovation and entrepreneurship, a forum on investment cooperation and a meeting for ‘matchmaking’ projects and investments.33 The 70th anniversary of diplomatic relations will also be commemorated with the Sino-Russian Innovation Cooperation Week.34

Science and technology parks

The establishment of a growing number of Sino-Russian S&T parks has been among the most tangible manifestations of growing cooperation. Moscow and Beijing believe that scientific and industrial parks can create a foundation and an infrastructure that’s critical to sustained bilateral cooperation. Since so many of these efforts remain relatively nascent, it’s too early to gauge their success—yet the growing number of such efforts reflects growing bilateral cooperation.

  • As early as 2006, the Changchun Sino-Russian Science and Technology Park was established as a base for S&T cooperation and innovation. It was founded by the Jilin Provincial Government and the Chinese Academy of Sciences, in cooperation with the Russian Academy of Sciences’ Siberian Branch and the Novosibirsk state of the Russian Federation.35 The park has specialised in creating new opportunities for collaboration and for the transfer and commercialisation of research and technology.36 Over more than a decade, it has built an ‘innovation team’ composed of colleges and universities, scientific research institutions and private enterprises.37
  • In June 2016, the plan for the China–Russia Innovation Park was inaugurated with support from the Shaanxi Provincial Government, the Russian Direct Investment Fund and the Sino-Russian Investment Fund. The park was completed in 2018, with information technology, biomedical and artificial intelligence enterprises invited to take part. According to the development plan, the park aims at research and development of new technologies and the integration of new tech with the social infrastructure of both countries.38
  • Also in June 2016, the Sino-Russian Investment Fund and the Skolkovo Foundation signed an agreement to build a medical robot centre and to manufacture medical robots in China with support from experts at the Russian Academy of Sciences’ School of Design and Technology.39 The state-funded Skolkovo initiative, launched in 2010, is Russia’s leading technology innovation space. The foundation manages many high-tech projects that include deep machine learning and neural network techniques.40
  • In June 2016, the China–Russia Silk Road Innovation Park was established in the Xixian New District of Xian.41 This initiative is framed as an opportunity to construct a modern industrial system as the main line of development, ‘striv[ing] to create an innovation and entrepreneurship centre with the highest degree of openness and the best development environment in the Silk Road Economic Belt’. This park welcomes entrepreneurs from China and Russia.
  • In December 2017, S&T parks from China and Russia agreed to promote the construction of a Sino-Russian high-tech centre at Skolkovo, which aims to become Russia’s Silicon Valley.42 The Skolkovo Foundation, which manages the site, agreed to provide the land, while Tus-Holdings Co Ltd and the Russia–China Investment Fund will jointly finance the project. This high-tech centre is intended to serve as a platform to promote new start-ups, including by attracting promising Chinese companies.
  • In October 2018, the Chinese city of Harbin also emerged as a major centre for Sino-Russian technological cooperation.43 This initiative is co-founded by GEMMA, which is an international economic cooperation organisation registered in Russia, and the Harbin Ministry of Science and Technology.44 At present, 19 companies are resident in the centre, which is expected to expand and receive robust support from the local government. Harbin’s Nangan District has expressed interest in cooperation with Russian research institutes in the field of AI.45
  • The cities of Harbin and Shenzhen have been selected for a new ‘Two Countries, Four Cities’ program, which is intended to unite the potentials of Moscow, Yekaterinburg, Harbin and Shenzhen.46 As of 2019, there are plans for the opening of another Russian innovation centre in the city of Shenzhen—a high-tech park that will concentrate on information technology47—enabling resident companies to enter the China market with their own software and technologies, such as big data and automation systems for mining.48

Joint funds

China and Russia are also increasing investments into special funds for research on advanced technology development.

  • The Russia–China Investment Fund for Regional Development signed on as an anchor investor in two new funds at Skolkovo Ventures to the tune of US$300 million in October 2018.49 This fund will also pour money into Skolkovo’s funds for emerging companies in information technology, which each currently have US$50 million in capital.50
  • The Russia–China Science and Technology Fund was established as a partnership between Russia’s ‘Leader’ management company and Shenzhen Innovation Investment Group to invest as much as 100 million yuan (about US$14 million) into Russian companies looking to enter the China market.51
  • The Chinese and Russian governments have been negotiating to establish the Sino-Russian Joint Innovation Investment Fund.52 In July 2019, the fund was officially established, with the Russian Direct Investment Fund and the China Investment Corporation financing the $1 billion project.53

Contests and competitions

Engagement between the Chinese and Russian S&T sectors has also been promoted through recent contests and competitions that have convened and displayed projects with the aim of facilitating cooperation.

  • In September 2018, the first China–Russia Industry Innovation Competition was convened in Xixian New District.54 The competition focused on the theme of ‘Innovation Drives the Future’, highlighting big data, AI and high-end manufacturing.55 The projects that competed included a flying robot project from Beijing University of Aeronautics and Astronautics and a brain-controlled rehabilitation robot based on virtual reality and functional electrical stimulation.
  • In April 2019, the Roscongress Foundation together with VEB Innovations and the Skolkovo Foundation launched the second round of the EAST BOUND contest, which gives Russian start-ups an opportunity to tell foreign investors about their projects. This time, the contest will support AI developments.56 The finalists spoke at SPIEF–2019 (the St Petersburg International Economic Forum) and presented their projects to a high-profile jury consisting of major investors from the Asia–Pacific region.57

Expansion of academic cooperation

In July 2018, the Russian and Chinese academies of sciences signed a road-map agreement to work on six projects.58 The agreement joins together some of the largest academic and research institutions around the world and includes commitments to expand research collaboration and pursue personnel exchanges. The Chinese Academy of Sciences has more than 67,900 scientists engaged in research activities,59 while the Russian Academy of Sciences includes 550 scientific institutions and research centres across the country employing more than 55,000 scientists.60

These projects include a concentration on brain functions that will include elements of AI.61 The Russian side is motivated by the fact that China occupies a world-leading position in the field of neuroscience,62 including through the launch of the China Brain Project.63 The Russian Academy of Sciences delegation visited laboratories in Shanghai in August 2019 and commented on their counterpart academy’s achievements:

Brain research is a whole range of tasks, starting with genetics and ending with psychophysical functions. This includes the study of neurodegenerative diseases and the creation of artificial intelligence systems based on neuromorphic intelligence. Participation in this project is very important for Russia. China is investing a lot in this and has become a world leader in some areas …64

Priorities for partnership

Chinese–Russian technological cooperation extends across a range of industries, and the degree of engagement and productivity varies across industries and disciplines. As Sino-Russian relations enter this ‘new era’, sectors that have been highly prioritised include, but are not limited to, telecommunications; robotics and AI; biotechnology; new media; and the digital economy.

Next-generation telecommunications

The ongoing feud between the US and China over the Huawei mobile giant has contributed to unexpectedly rapid counterbalancing cooperation between Russia and China. In fact, President Vladimir Putin went on the record about this issue, calling the American pressure on the Chinese company the ‘first technological war of the coming digital age’.65 Encountering greater pressure globally, and this year in particular, Huawei has expanded its engagement with Russia, looking to leverage its STEM expertise through engaging with Russian academia. Since 2018, Huawei has opened centres first in Moscow, St Petersburg and Kazan and then in Novosibirsk and Nizhny Novgorod.66

Huawei also began monitoring the research capabilities of Russian universities, searching for potential joint projects, and in August 2019 the company signed a cooperation agreement on AI with Russia’s National Technology Initiative, which is a state-run program to promote high-tech development in the country.67 Based on a competition run by the Huawei Academy and Huawei Cloud, Russia’s best academic STEM institutions were selected.68 In May 2019, Huawei and the Siberian Branch of the Russian Academy of Sciences outlined areas and means of future cooperation.69

Underscoring its bullishness, China recently announced plans for a fourfold increase in its R&D staff in Russia going forward. In May 2019, the Huawei Innovation Research Program in Russia was launched, and Russian institutions have received 140 technological requests from Huawei in various areas of scientific cooperation.70 By the end of 2019, the company intends to hire 500 people, and within five years it will attract more than 1,000 new specialists.71 Huawei now has two local R&D centres in Moscow and St Petersburg, where 400 and 150 people work, respectively.72 By the end of the year, it plans to open three new R&D centres, and Russia will then be ranked among the top three Huawei R&D centres, after Europe and North America.73 The company plans to engage in close cooperation with Russian scientific communities, universities and other research centres.

At present, Russia doesn’t appear to share deep American concerns about security related to Huawei technology.74 Huawei has started actively expanding its 5G testing in the Russian Federation, partnering with Russia’s Vimplecom to test a 5G pilot area in downtown Moscow starting in August 2019.75 Commentators have stated that Russia, which isn’t considered a technological leader, has ‘the potential to get ahead globally’ now that it has Chinese high-tech enterprises as allies.76 During the summer of 2019 at SPIEF, Huawei continued to discuss with Skolkovo plans to develop 5G network technology at the innovation centre, and also to do research in AI and internet of things (IoT) projects.77

In fact, at that forum, Russia and China outlined a large-scale cooperation program in order to prepare a road map for future investment and cooperation on issues such as cybersecurity and the IoT.78 As US pressure on Huawei continues, there’s even a possibility that the Chinese company might abandon the Android operating system (OS) altogether and replace it with the Russian Avrora OS.79 If this transaction goes through, it would be the first time that a Russian OS has contributed to a significant global telecoms player.

Whether Huawei can become a trusted name in Russia’s tech sector and defence industries remains to be seen. There are also reasons to question whether Russia truly trusts the security of Huawei’s systems, but it may be forced to rely upon them, absent better options. As an illustration of potential complications, in August 2019, Russia’s MiG Corporation, which builds Russia’s fighter jets, was caught in a legal battle with one of its subcontractors over software and hardware equipment.80 The subcontractor in question, Bulat, has been one of Russia’s most active companies in riding the wave of the ‘import substitution’ drive in effect since Western sanctions were imposed on the Russian defence industry. However, in this case, Bulat didn’t offer Russian-made technology; rather, it used Huawei’s servers and processors.81 Although MiG did not say publicly why it didn’t pay Bulat, it appears that the aircraft corporation actually requested Chinese technology for its operations. 82

Big data, robotics and artificial intelligence

For China and Russia, AI has emerged as a new priority in technological cooperation. For instance, the countries are seeking to expand the sharing of big data through the Sino-Russian Big Data Headquarters Base Project,83 while another project has been launched to leverage AI technologies, particularly natural language processing, to facilitate cross-border commercial activities, intended for use by Chinese and Russian businesses.84 China’s Ambassador to Russia, Li Hui, said at an investment forum in the autumn of 2018 that the two countries should increase the quality of bilateral cooperation and emphasise the digital economy as a new growth engine, highlighting opportunities for collaboration in AI, along with big data, the internet and smart cities.85 Ambassador Li emphasised:

Russia has unique strength in technological innovation and has achieved significant innovations in many fields of science and technology. China and Russia have unique economic potential and have rich experience in cooperation in many fields. Strengthening collaboration, promoting mutual investment, actively implementing promising innovation projects, expanding direct links between the scientific, business and financial communities of the two countries is particularly important today.86

This bilateral AI development will benefit from each country’s engineers and entrepreneurs.87 From Russia’s perspective, the combined capabilities of China and Russia could contribute to advancing AI, given the high-tech capabilities of Russia’s R&D sector.88 While Russia’s share of the global AI market is small, that market is growing and maturing.89 In Russia, a number of STEM and political figures have spoken favourably about the potential of bilateral R&D in AI. At the World Robotics Forum in August 2017, Vitaly Nedelskiy, the president of the Russian Robotics Association, delivered a keynote speech in which he emphasised that ‘Russian scientists and Chinese robot companies can join hands and make more breakthroughs in this field of robotics and artificial intelligence. Russia is very willing to cooperate with China in the field of robotics.’90 According to Song Kui, the president of the Contemporary China– Russia Regional Economy Research Institute in northeast China’s Heilongjiang Province, ‘High-tech cooperation including AI will be the next highlight of China–Russia cooperation.’91

In fact, bilateral cooperation in robotics development has some Russian developers and experts cautiously optimistic. According to the chief designer at Android Technologies, the Russian firm behind the FEDOR (Skybot F-850) robot that was launched to the International Space Station on 22 August 2019, ‘medicine may be the most promising for cooperation with China in the field of robotics.’92

However, hinting at potential copyright issues with respect to China, he further clarified:

[M]edical robotics is better protected from some kind of copying, because if we [Russians] implement some components or mechatronic systems here [in China], then we can sell no more than a few pieces … But since medical robotics is protected by technology, protected by the software itself, which is the key, the very methods of working with patients, on the basis of this, this area is more secure and most promising for [Russian] interaction with the Chinese.93

Revealingly, concerns about copying are a constraint but might not impede joint initiatives, given the potential for mutual benefit nonetheless.

Indeed, advances in AI depend upon massive computing capabilities, enough data for machines to learn from, and the human talent to operate those systems.94 Today, China leads the world in AI subcategories such as connected vehicles and facial and audio recognition technologies, while Russia has manifest strengths in industrial automation, defence and security applications, and surveillance.95 Based on recent activities and exchanges, there are a growing number of indications that Chinese–Russian collaboration in AI is a priority that should be expected to expand.

  • In August 2017, the Russian Robotics Association signed agreements with the China Robotics Industry Alliance and the China Electronics Society with support from China’s Minister of Industry and Information Technology and Russia’s Minister of Industrial Trade.96
  • In October 2017, Chinese and Russian experts participated in a bilateral engagement, hosted by the Harbin Institute of Technology and the Engineering University of the Russian Federation, that focused on robotics and intelligent manufacturing, exploring opportunities for future cooperation in those technologies.97
  • In April 2018, Russia hosted the Industrial Robotics Workshop for the first time.98 The workshop participants included the leading suppliers of technology and robotic solutions, including Zhejiang Buddha Technology.99 The Chinese participants noted that the Chinese market in robotics is now stronger than ever and advised Russian colleagues to seek help from the state.100
  • In May 2019, NtechLab, which is one of Russia’s leading developers in AI and facial recognition, and Dahua Technology, which is a Chinese manufacturer of video surveillance solutions, jointly presented a wearable camera with a face recognition function, the potential users of which could include law enforcement agencies and security personnel.101 According to NtechLab, the company sees law enforcement agencies and private security enterprises among its potential customers.102
  • In September 2019, Russian and Chinese partners discussed cooperation in AI at the sixth annual bilateral ‘Invest in Innovation’ forum held in Shanghai. The forum outlined the possibility of a direct dialogue between venture investors and technology companies in Russia and China.103 There, the head of Russian Venture Company (a state investor) noted that ‘artificial intelligence seems to be promising, given the potential of the Chinese market, the results of cooperation, and the accumulated scientific potential of Russia.’104

Biotechnology

Chinese and Russian researchers are exploring opportunities to expand collaboration in the domain of biotechnology. In September 2018, Sistema PJSFC (a publicly traded diversified Russian holding company), CapitalBio Technology (an industry-leading Chinese life science company that develops and commercialises total healthcare solutions), and the Russia–China Investment Fund agreed to create the largest innovative biotechnology laboratory in Russia.105 The laboratory will focus on genetic and molecular research. Junquan Xu, the CEO of CapitalBio Technology, said:

[W]e are honoured to have this opportunity to cooperate with the Russia–China Investment Fund and Sistema … We do believe that the establishment of the joint laboratory will further achieve resource sharing, complementary advantages and improve the medical standards.106

New media and communications

Chinese and Russian interests also converge on issues involving new media. In 2019, Russia intends to submit to the Chinese side a draft program of cooperation in the digital domain.107 China recently hosted the 4th Media Forum of Russia and China in Shanghai with the goal of creating a common digital environment conducive to the development of the media of the two countries, the implementation of joint projects and the strengthening of joint positions in global markets.108 In fact, China’s side discussed joint actions aimed at countering Western pressure against the Russian and Chinese media.109 Both Russia and China aim to develop common approaches and response measures to improve their capacity to promote their point of view—a dynamic that the Chinese Communist Party characterises as ‘discourse power’ (话语权).110 According to Alexey Volin, the Russian Deputy Minister of Digital Development, Telecommunications and Mass Media:

If Twitter, YouTube or Facebook follow the path of throwing out Russian and Chinese media from their environment, then we will have nothing else to do but create new distribution channels, how to think about alternative social networks and instant messengers.111

Such cooperation in new media, internet governance, and propaganda extends from technical to policy-oriented engagements. For instance, at SPIEF–2019, Sogou Inc. (an innovator in research and a leader in China’s internet industry) announced the launch of the world’s first Russian-speaking AI news anchor, which was developed through a partnership with ITAR-TASS, which is Russia’s official news agency, and China’s Xinhua news agency.112 According to the official announcement, the Russian-speaking news anchor features Sogou’s latest advances in speech synthesis, image detection and prediction capabilities, introducing more engaging and interactive content for Russian audiences.113 ‘AI anchors,’ which are starting to become a fixture and feature of China’s media ecosystem, can contribute to the landscape of authoritarian propaganda. During the World Internet Conference in October 2018, China and Russia also plan to sign a treaty involving the Cyberspace Administration of China and Roskomnadzor about ‘combatting illegal internet content.’114

The digital economy

China’s tech giants see business opportunities in Russia’s nascent digital economy. Russia’s data centres are gaining increased capabilities as Chinese companies move into this market. Over the past year, more than 600 Tencent racks have been installed in IXcellerate Moscow One, becoming its largest project. Tencent’s infrastructure will be used for the development of its cloud services and gaming. This project opens up new prospects for Tencent in Russia, which has the highest number of internet users in Europe (about 100 million—a 75% penetration rate).115 All provided services, including the storage and processing of personal data, are expected to be in full compliance with Russian legislation.116 In late 2018, Alibaba Group Holding Ltd started establishing a US$2 billion joint venture with billionaire Alisher Usmanov’s internet services firm Mail.ru Group Ltd to strengthen the Chinese company’s foothold in Russian e-commerce.117 Usmanov is one of Russia’s richest and most powerful businessmen, and his fortunes depend upon the Kremlin’s goodwill as much as on his own business acumen. In this deal, Alibaba signed an accord with Mail.ru to merge their online marketplaces in Russia, which is home to 146 million people. The deal was backed by the Kremlin through the Russian Direct Investment Fund, and the local investors will collectively control the new business.118

Problems in partnership and obstacles to technological development

To date, Sino-Russian cooperation in S&T has encountered some problems. Those issues have included not only insufficient marketisation but also initial Russian reservations about China’s One Belt, One Road initiative, which has been closely linked to scientific and technological collaboration.119 Additionally, there’s evidence that there may still be significant trust issues that impede adopting or acquiring Chinese-made high-tech products for the Russian markets. For example, in a February 2019 interview, Evgeny Dudorov, the CEO of Android Technologies (which built the FEDOR robot), said in a public interview that his company did not want to adopt Chinese robotics parts ‘due to their poor quality’.120

China’s track record over IP theft may be a concern, but it doesn’t seem that Russia is presently as anxious as others about this issue.For instance, Vladimir Lopatin, the Director of the Intellectual Property Department at the Russian Republican Centre for Intellectual Property, sounded a warning about Chinese activities back in 2013:

[T]he prevailing practice of theft and illegal use of Russian intellectual property in the production of counterfeit products by Chinese partners has led to a widespread critical decline in the level of confidence in them from Russian academic and university science centres and enterprises. This is a significant factor in restraining the implementation of strategic initiatives of innovative cooperation between the two countries …121

However, such sentiment does not appear to be so widespread at present. For instance, the Russian media typically concentrates on US–China IP disputes while presenting Sino-Russian high-tech activity in a primarily positive light. Moscow today may be merely resigned, given the long history of Chinese reverse-engineering of Russian defence technologies, but it’s notable that the Chinese Government is publicising promises to enforce IP protection vis-a-vis its Russian counterpart, implying that perhaps a detente has been reached.122 At this point, Russia seems to be more concerned about China possibly stealing its best and brightest scientists—in September 2019, the head of the Russian Academy of Sciences expressed concern that Beijing seems to be successful in starting to attract Russian STEM talent with better pay and work conditions.123 He also seemed concerned that, due to its better organisation and development goals, China was becoming a ‘big brother’ to Russia in not just economic but scientific development and called for a study of China’s overall STEM success.124

At the same time, such bilateral cooperation isn’t immune to the internal politics and certain economic realities in both nations. For instance, in what was obviously an unexpected setback, Tencent admitted back in 2017 it was ‘deeply sorry’ that its social media app WeChat had been blocked in Russia, adding that it was in touch with authorities to try to resolve the issue.125 Russian telecoms watchdog Roskomnadzor listed WeChat on the register of prohibited websites, according to information posted on the regulator’s website. ‘Russian regulations say online service providers have to register with the government, but WeChat doesn’t have the same understanding [of the rules],’ Tencent said in a statement at the time. Equally important is Russia’s ongoing uphill battle in import-substitution of high-tech and industrial components, as a result of the sanctions imposed by the West in 2014 and 2015. Despite significant progress, Russia is still reliant upon Western technology procured by direct or indirect means, and Moscow is not always keen to embrace Chinese high-tech as a substitute.

In Russia, the most lucrative companies are entangled within semi-monoplistic structures close to the Russian Government. Those players are few in number and tend to wield enormous influence in the Russian economy. As a result, the possible high-tech contact nodes between Moscow and Beijing lead through a small number of offices belonging to the most powerful and connected individuals. The true test of the Sino-Russian bilateral relationship concerning high-tech products and services may be in attempting to expand to the medium- and small-sized businesses and enterprises offering the most nimble and capable solutions. For example, the head of Russian Venture Company, a state investor, noted the difficulties in creating tools for a joint venture fund:

We did not resolve the problem of investing in a Russian venture fund. Withdrawing money from China to Russian jurisdictions under an understandable partnership and an understandable instrument is nevertheless difficult.126

Moreover, for both China and Russia, a significant challenge remains: promising young scientists in both countries would prefer to work elsewhere, namely in the US. Some recent polls and anecdotal evidence point to a continuously strong desire for emigration among the best educated, and especially among those with already established international professional relationships.127 This is especially true for Russia. However, as its National Technology Initiative has observed:

We believe that everybody for whom the Californian comfort, sun, wine, mountains and oceans are important has already left Russia. Others realise that the wine, mountains and sea in Sevastopol are just as good.128

For China, the current paradox is that, while Beijing offers plenty of incentives for its STEM community to stay in the country, many researchers choose, in fact, to work overseas, particularly in American institutions.129 The establishment of numerous S&T initiatives outlined in this paper is meant to offset that trend, but the trajectory of so many efforts launched recently remains to be seen.

Conclusions and implications

The Chinese–Russian high-tech partnership may continue to progress in the coming years, as both countries look to leverage each other’s capabilities to advance high-tech developments. China is clearly approaching Russia for its STEM R&D and S&T proficiencies, and Russia seems to be happy to integrate itself more into Chinese high-tech capabilities, and yet it is Beijing that emerges as a dominant player in this bilateral cooperation, while Russia tends to find itself in a position of relative disadvantage. Russia lacks such giants as China’s Baidu, Tencent and Alibaba, which are starting to expand globally, including into the Russian market.130 Nonetheless, as the Russian Government seeks to jump-start its own indigenous innovation, China is seen as a means to an end—and vice versa.

After all, Russian Deputy Prime Minister Maxim Akimov told reporters on the sidelines of the VI Russia–China Expo in Harbin that Russia is interested in cooperation with China in the cybersecurity sphere and in the development of technology solutions: ‘We keep a close eye on the experience of Chinese colleagues.’131

However, the future trajectory of this relationship could be complicated by questions of status and standing, not to mention politics and bureaucracy, as such projects, financing and research accelerate.

Russia may benefit from its embrace of China’s technology prowess and financing, but the full range of risks and potential externalities is still emerging and perhaps poorly understood. As Sino-Russian partnership has deepened, observers of this complex relationship have often anticipated some kind of ‘break’ in the ongoing Russo-Chinese ‘entente’.132 Many commentators find it difficult to believe that countries with such global ambitions and past historical grievances can place much trust in each other.

Certainly, there have been subtle indications of underlying friction, including Russia’s initial reluctance to embrace Xi’s signature One Belt, One Road initiative, to which Moscow has since warmed, or so it seems.

Going forward, high-tech cooperation between Moscow and Beijing appears likely to deepen and accelerate in the near term, based on current trends and initiatives. In a world of globalised innovation, scientific knowledge and advanced technologies have been able to cross borders freely over the past quarter of a century. China and Russia have been able to take advantage of free and open STEM development, from life sciences to information technology and emerging technologies, applying the results to their own distinctive technological ecosystems. Today, however, as new policies and countermeasures are introduced to limit that access, China and Russia are seeking to develop and demonstrate the dividends from a new model for scientific cooperation that relies less and less on foreign, and especially American, expertise and technology, instead seeking independence in innovation and pursuing developments that may have strategic implications.

Policy considerations and recommendations

In response to these trends and emerging challenges, like-minded democracies, particularly the Five Eyes states, should pursue courses of action that include the following measures.

  • Track the trajectory of China–Russia tech collaborations to mitigate the risks of technological surprise and have early warning of future threats. This calls for better awareness of Sino-Russian joint high-tech efforts among the Five Eyes states, in conjunction with allies and partners and relevant stakeholders, that goes beyond the hype of media headlines by developing better expertise on and understanding of the strengths and weaknesses of Russian and Chinese technological developments.
  • Monitor and respond to tech transfer activities that involve IP theft or the extra-legal acquisition of technologies that have dual-use or military potential, including those activities where there is a nexus between companies and universities with Russian and Chinese links. The US and Australia, along with their allies and partners, should coordinate on export controls, screening of investment and restrictions against collaborations with military-linked or otherwise problematic institutions in China and Russia. Otherwise, unilateral responses will prove inadequate to counter the global threat of Chinese industrial espionage, which is undertaken through a range of tech transfer tactics and is truly international in scope at scale.133
  • Deepen cooperation among allies and partners on emerging technologies, including by pursuing improvements in data sharing. The US and Australia should promote greater technological collaboration between Five Eyes governments in the high-tech sectors that are shared priorities in order to maintain an edge relative to competitors. For instance, arrangements for sharing of data among allies and partners could contribute to advances in important applications of AI. To compete, it will be critical to increase funding for STEM and high-tech programs and education in the Five Eyes countries.
  • Promulgate norms and ethical frameworks for the use of next-generation technologies, particularly AI, that are consistent with liberal values and democratic governance. In the process, the US and Australia, along with concerned democracies worldwide, should mount a more coordinated response to Russian and Chinese promotion of the concept of cyber sovereignty as a means of justifying repressive approaches to managing the internet and their advancement of AI for censorship and surveillance.

Acknowledgements

The authors would like to thank Danielle Cave, Fergus Hanson, Alex Joske, Rob Lee and Michael Shoebridge for helpful comments and suggestions on the paper.

What is ASPI?

The Australian Strategic Policy Institute was formed in 2001 as an independent, non‑partisan think tank. Its core aim is to provide the Australian Government with fresh ideas on Australia’s defence, security and strategic policy choices. ASPI is responsible for informing the public on a range of strategic issues, generating new thinking for government and harnessing strategic thinking internationally.

ASPI International Cyber Policy Centre

ASPI’s International Cyber Policy Centre (ICPC) is a leading voice in global debates on cyber and emerging technologies and their impact on broader strategic policy. The ICPC informs public debate and supports sound public policy by producing original empirical research, bringing together researchers with diverse expertise, often working together in teams. To develop capability in Australia and our region, the ICPC has a capacity building team that conducts workshops, training programs and large-scale exercises both in Australia and overseas for both the public and private sectors. The ICPC enriches the national debate on cyber and strategic policy by running an international visits program that brings leading experts to Australia.

Important disclaimer

This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.

© The Australian Strategic Policy Institute Limited 2019

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  1. ‘China, Russia agree to upgrade relations for new era’, Xinhua, 6 June 2019, online. ↩︎
  2. ‘Russia and China celebrate 70 years of the establishment of diplomatic relations’ [Россия и Китай отмечают 70-летие установления дипотношений], TVC.ru, 30 September 2019, online. ↩︎
  3. Official evening commemorating 70th years of diplomatic relations between Russia and China (Вечер, посвящённый 70-летию установления дипломатических отношений между Россией и Китаем), Official website of the Russian President, June 5, 2019 ↩︎
  4. This paper uses entirely open sources, and there are inherently limitations in the information that is accessible. Nonetheless, we hope this is a useful overview that leverages publicly available information to explore current trends. ↩︎

Engineering global consent: The Chinese Communist Party’s data-driven power expansion

The Chinese party-state engages in data collection on a massive scale as a means of generating information to enhance state security—and, crucially, the political security of the Chinese Communist Party (CCP)—across multiple domains. The party-state intends to shape, manage and control its global operating environment so that public sentiment is favourable to its own interests. The party’s interests are prioritised over simply the Chinese state’s interests or simply the Chinese people’s interests. The effort requires continuous expansion of the party’s power overseas because, according to its own articulation of its threat perceptions, external risks to its power are just as likely—if not more likely—to emerge from outside the People’s Republic of China’s (PRC) borders as from within.

This report explains how the party-state’s tech-enhanced authoritarianism is expanding globally. The effort doesn’t always involve distinctly coercive and overtly invasive technology, such as surveillance cameras. In fact, it often relies on technologies that provide useful services. Those services are designed to bring efficiency to everyday governance and convenience to everyday life. The problem is that it’s not only the customer deploying these technologies—notably those associated with ‘smart cities’, such as ‘internet of things’ (IoT) devices—that derives benefit from their use. Whoever has the opportunity to access the data a product generates and collects can derive value from the data. How the data is processed, and then used, depends on the intent of the actor processing it.

Designing for resilient energy systems: Choices in future engineering

v

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Areality of modern times is the public expectation that not only will flows of potable water from their taps and home sewage systems simply always be there, but their lights will always turn on at the flick of a switch. An enabler that underpinning all these expectations is an effective and efficient electricity supply.

These services along with transport, and telecommunication systems are universally considered to be essential for raising the quality of life for humans. Access to these services is also a central factor in the productivity of firms and thus of entire economies, making them a key enabler of economic development.

What do young Australian engineers who have inherited our present world think about the challenges of designing resilient energy systems within the parameters of new and emerging technologies? Commissioned by Engineers Australia in partnership with ASPI, this report presents the thoughts of four young engineers on innovative energy design projects they are currently working on, as well as their views on the challenges they foresee for the design of future energy systems. These four sections are bookended by the views of two established leaders within the engineering profession.

ASPI-KAS 4th Australia-Europe Counter-Terrorism Dialogue ‘Shifting frontiers: addressing post-caliphate terrorism dynamics’

In October 2018, a delegation of counterterrorism (CT) practitioners, policymakers and academics travelled from Europe to Australia to participate in the 4th Australia–Europe Counterterrorism Dialogue, titled ‘Shifting Frontiers: Addressing Post-Caliphate Terrorism Dynamics’. This annual Track 1.5 dialogue was initiated in 2015 by Dr Beatrice Gorawantschy, the Director of the Regional Programme Australia and the Pacific at the Konrad Adenauer Foundation (KAS) and Mr Peter Jennings, the Executive Director of the Australian Strategic Policy Institute (ASPI). They had recognised that Australia and Europe shared similar challenges in countering violent extremism (CVE)—and yet no forum existed for those involved in combating these issues to share their views, develop better understandings and explore how cooperation could be strengthened.

Proving to be a winning formula, this laid the groundwork for a number of successful seminars and thought-provoking exchanges. The 2017 dialogue, for instance, took an Australian delegation to Berlin and Brussels to explore how to proactively deal with an ever-evolving threat landscape. The 2018 ASPI–KAS Dialogue continued with this theme by focusing on how the fall of the Islamic State’s ‘caliphate’ in the Middle East would affect terrorism dynamics. In particular, it sought to identify the extent to which Australia and European states had adjusted their systems and outlooks to respond to the challenges posed by ISIS in the ‘post-caliphate’ period. Discussions were held under the Chatham House rule to allow for an open, confidential exchange.

This report covers the key themes of the dialogue, which were deliberately chosen to reflect contemporary trends. The overarching purpose is to capture the main ideas discussed at the dialogue and link them to wider policy-relevant debates. The various contributions by participants from Australia and Germany illustrate this breadth of perspectives.

Mind your tongue

Language, public diplomacy and community cohesion in contemporary Australia–China relations

What’s the problem?

As Australia is compelled to engage a more confrontational China, there’s a risk that political commentary and media reporting on China’s influence and interference operations in Australia could affect Chinese-Australian communities adversely. What can well-meaning Australians do to help? And how can Chinese-Australian communities be enlisted as equal partners in meeting the challenges ahead?

The problem is twofold. On one side is the Chinese party-state. Agencies of the Chinese Communist Party (CCP) misrepresent and distort Australian commentary and reporting about the party’s conduct at home and abroad, its interference operations in Australia, and legitimate Australian responses to its conduct and operations. The aim is to divert or silence criticism of the party, disarm critical voices in the Chinese-Australian community, and drive a wedge between communities within Australia.

On the other side are Australian politicians and media who run the risk of alienating and possibly stigmatising Chinese-Australians through misleading claims or imprecise choices of words.

What’s the solution?

This briefing paper offers constructive suggestions for those who want to listen and for those who want to speak without causing unnecessary confusion or offence. 

General recommendations 

  1. Generalisations are not ideal but they are often unavoidable. In generalising about Chinese-Australians, all politicians, media and commentators should recognise the enormous diversity among communities and individuals and reflect this diversity in their speech and conduct. This could for example mean routinely using the plural form ‘Chinese-Australian communities,’ in place of ‘community,’ or adding words such as ‘diverse ’ or ‘ disparate,‘ as in ‘diverse Chinese-Australian communities.’ 
  2. In speaking or writing about China, Australian politicians, media and commentators should distinguish clearly between the Government of China, the CCP and the people of China, and distinguish Chinese-Australians and their many different communities from all of the above. 
  3. Australian politicians, media and commentators should avoid associating Chinese-Australians with the Chinese Government, the Chinese flag or the CCP, unless Chinese-Australians expressly wish to be associated in this way (which they are perfectly entitled to do). 
  4. Australian politicians, media and commentators should avoid using the English word ‘Chinese’ as a stand-alone word when another word will do. Using ‘Chinese’ as a prefix (‘Chinese-Australians’) or adjective (‘Chinese Government’) is generally fine. 
  5. Australians using social media based in China should bear in mind that their conversations with other Australians on Australian soil are monitored and censored by a foreign power. 
  6. Before using social media platforms, politicians and political parties should ask themselves whether using platforms that do not permit free and respectful discussion of fundamental political issues, among Australians on Australian soil, is consistent with their basic principles, and if it’s not consistent then refrain from using them under any circumstances. 
  7. Politicians and political parties should as far as possible refrain from rhetorically attributing racist motives (where not justified) to their critics and opponents on sensitive issues relating to China and Australia’s diverse Chinese-Australian communities.

Recommendations to government

  1. Australian Government representatives should firmly rebuff all claims of racism and bigotry relating to Australia made by representatives of the Chinese Government whether in China, Australia or elsewhere, immediately those claims are made. 
  2. Foreign state ownership or control of media and placement of foreign state content in all Australian media, including social media, should be made subject to registration and reporting consistent with the Foreign Influence Transparency Scheme legislation.1

Public diplomacy, China style

The CCP takes public diplomacy seriously, both as party and as government. Through its international propaganda arms, it has spent around A$10 billion each year over the past decade to frame what people of other countries say and write about China.2 The aim is to foster a positive image of China under CCP rule and curate local conversations about issues of particular concern in order to shape other governments’ policies and programs in ways that favour China’s commercial interests and long-term strategic goals.

In seeking to influence foreign opinion in its favour, China’s government resembles other governments. Foreign influence operations are an everyday part of public diplomacy and are welcomed where they’re legitimate and transparent. But public diplomacy crosses the line from legitimate influence to improper interference when it involves covert, coercive or corrupt behaviour.3 In Australia, such behaviour attracts legislative remedies and security responses in addition to public censure.4

The Chinese Government engages in a range of visible and acceptable influence operations. At the legitimate end of the spectrum, it targets people outside China through cultural agreements and exchanges, hosts public events, and supports media and print publications and educational programs. In Australia, it provides journalists with free guided trips to China, supplies schools with language learning and cultural studies textbooks, and co-funds Confucius Classrooms in state school systems and Confucius Institutes on university campuses. Those efforts often bear fruit. No other country has managed to embed its own government’s particular reading of history, politics and culture within other countries’ educational systems as effectively as the Government of China.5 

At the improper end of the spectrum, influence becomes interference. Through government and party channels, authorities based in Beijing are known to have censored Chinese-Australian community media, threatened private firms so as to limit commercial advertising in media outlets they disapprove of, made efforts to extend control over Chinese-Australian community organisations, and intimidated religious believers. Embassy and consular officials have called upon university executives to cancel events they regard as offensive. Above all, the CCP has engaged in wedge politics to undermine legitimate public debate on Chinese Government policy and conduct within Australia.

Wedging race

Wedge politics exploits differences among target communities. The CCP engages in a particular form of wedge politics known as ‘united front’ (tongyi zhanxian, literally united battlefront) work—a byword for a strategy of exploiting internal divisions among the party’s critics or adversaries by forming tactical alliances with some on the other side to isolate and destroy the party’s designated enemies from within.This confrontational and divisive strategy is institutionalised at the highest levels of the CCP organisation where it is coordinated through the United Front Work Department and International Liaison Department of the CCP Central Committee.6 It’s ‘united’ only in the sense that the party seeks to unite people on either side of a ‘battlefront’ with the aim of subverting and overcoming so-called enemies who stand in its way.7

The CCP’s united front strategy proved highly successful in the civil war that brought the party to power in 1949, enabling it to recruit non-communist politicians, business leaders, media owners and intellectuals in order to undermine the Nationalist government (1928–1949) from within.8 Today, the party seeks to replicate this historical success on a global scale by recruiting foreign business leaders, retired officials, community leaders and compliant media to its service, silence its critics internationally, and advance the interests of the party by undermining the integrity of the foreign social, political and cultural institutions it targets for penetration.

In applying united front tactics to Australia, the CCP appears to have settled on race or ethnic identity as its preferred wedge issue. Australian criticisms of China’s policies and activities at home and abroad are routinely met with accusations of racial prejudice.

John Lee, formerly senior national security adviser to former Australian Foreign Minister, Julie Bishop

As awkward as it is, there is no escaping that race and ethnicity has become a legitimate political and national security issue and we need to be frank and upfront about the cause. It is occurring primarily because the Communist Party has chosen to politicize and even weaponize race as a tool of foreign policy and subversion.

John Lee, ‘Australia’s Gladys Liu scandal shows how the Chinese Communist Party is weaponizing race,’ CNN, 24 September 2019, online.

China’s party and government officials seek to divide Australian public opinion by suggesting that any hint of criticism of the CCP or its influence operations is bigoted or racist. In December 2017, China’s embassy in Canberra criticised Australian media for having ‘unscrupulously vilified the Chinese students as well as the Chinese community in Australia with racial prejudice.’ 9 In March 2018 the embassy accused the author of a book detailing China’s influence and interference operations in Australia of ‘racist bigotry.’10 And in June 2018 China’s resident Ambassador, referring to the passage of federal legislation to limit foreign government interference in Australian public life, urged the Australian Government to put an end to ‘bigotry’ in bilateral relations11. Within China, party, media and establishment intellectuals echo official claims of racism and bigotry, and prominent Australian public figures advance the party’s agenda through China’s propaganda media by misconstruing comments of fellow Australians as racist slurs.12 Within Australia, mainstream media organisations amplify CCP claims of racism and bigotry through uncritical repetition.13 

To facilitate the CCP’s wedge politics, its champions abroad obscure critical differences between the concepts of party, government and people to ensure that any criticism of the party or government can be dismissed as ‘anti-Chinese’ bigotry.

John Garnaut, former Fairfax China correspondent and prime ministerial adviser

A key to the party’s operations in Australia is collapsing the categories of Chinese Communist Party, China, and the Chinese people into a single organic whole—until the point where the party can be dropped from polite conversation altogether. The conflation means that critics of the party’s activities can be readily caricatured and attacked as anti-China, anti-Chinese, and Sinophobic—labels that polarize and kill productive conversation.

Source: John Garnaut, ‘How China interferes in Australia’, Foreign Affairs, 9 March 2018, online.

The orchestration of the party’s wedging exercise is clear from the absence of alternative voices among people of goodwill in China prepared to challenge claims of racism and bigotry. Few would dare, as the charge of being ‘anti-China’ or a ‘China traitor’ can also be levelled against Chinese citizens who publicly contradict Beijing’s official foreign policy positions.

Chinese Government claims of Australian racism aren’t widely challenged in Australia either. To date, no Australian Government representative has publicly repudiated official accusations of racism and bigotry levelled against Australia. The result is that some Chinese-Australians, along with other Australians, are misled into thinking that criticism of China is ‘racist’, particularly when it’s tagged to historical references to racial discrimination in Australia.14

Alex Joske, Chinese-Australian analyst

Beijing’s agents here are also keen to remind Australians of this country’s shameful history of racism against Chinese. The result is that when a Chinese-Australian is accused of having ties to Beijing, he may cry racism, saying that he’s being tarnished by connections to Beijing only because he’s ethnic Chinese. In the absence of balanced reporting in the Chinese-language media, many Australians are inclined to believe these claims.

Source: Alex Joske, ‘Beijing is silencing Chinese Australians’, New York Times, 6 February 2018, online.

On the whole, Australian society copes reasonably well with its ethnic and cultural diversity. Four or five decades of community-building efforts supporting multiculturalism have yielded positive results. Nonetheless, one in five Australians surveyed in 2018 reported experiencing racism in the last 12 months, and surveys among Asian Australians indicate widespread experience of racist comments and conduct.15 

In addition to the difficulties it poses for the health and well-being of minorities themselves, racism of any kind poses problems for Australian governments seeking to balance the management of domestic and international issues.

Badiucao, world-renowned Chinese-Australian artist

Communist China loves racism against its own people outside of China. It gives them the opportunity to unite the overseas population and sell the point that, you will only be protected and safe when you have a strong motherland.

Source: Bethany Allen Ebrahimian, ‘China’s rebel cartoonist unmasks’, Foreign Policy, 4 June 2019, online.

Racial profiling can also be counterproductive. Research collaborations between universities and research institutes in Australia and China, for example, are known to carry risks of cybercrime, intellectual property theft, espionage, and possible military and surveillance applications. But identifying possible breaches of research protocols by researchers’ nationality or ethnicity risks stigmatising all researchers of Chinese descent and hence playing into CCP wedge politics.

There are better ways to approach the problem. Identifying research risks through a research team’s institutional affiliations, corporate ties, project focus, or real-world military and surveillance applications is a fairer and surer way of identifying research collaborations that may present risks. On the evidence, an institutional or project-based focus suffices for the purpose.

Clive Hamilton, Charles Sturt University, and author of Silent invasion: China’s influence in Australia

Two Australian universities, University of Technology Sydney and Curtin University, are conducting internal reviews16 of their funding and research approval procedures after Four Corners revealed their links to researchers whose work has materially assisted China’s human rights abuses against the Uyghur minority in Xinjiang province.17 UTS, in particular, is in the spotlight because of a major research collaboration with CETC, the Chinese state-owned military research conglomerate. And UNSW scientists have collaborated with experts from the National University of Defence Technology (NUDT), a top military research centre, on China’s Beidou satellite system, which has many civilian as well as military uses, including tracking the movements of people and guiding missiles.18 In many cases, a clear connection can be drawn between the work that [People’s Liberation Army] personnel have done in Australia and specific projects they undertake for the Chinese military.19

Source: Excerpted from Clive Hamilton, ‘Australian universities must wake up to the risks of researchers linked to China’s military,’ The Conversation, 18 July 2019, online.

Foreign interference in Australian political, business, community and academic affairs can’t be ignored without damage to national sovereignty, security, prosperity and cohesion. Interference by the CCP in domestic Australian community life and politics risks stifling public debate within Australia, with potentially damaging effects on policymaking at all levels of government, while undermining community goodwill and social cohesion. For these reasons, all risks arising from a foreign power deliberately wedging issues of race and ethnic identity in Australia’s domestic society and politics need to be acknowledged and confronted.

When the CCP seeks to drive a wedge into the community politics of a foreign country such as Australia, it should be rebuffed and corrected. In particular, government representatives should firmly rebuff claims of racism and bigotry relating to Australia made by representatives of the Chinese Government in China, Australia and elsewhere, immediately those claims are made.

Manipulating community organisations and media

Some Australian political, business and community leaders may wish to be associated with CCP influence activities in Australia. That’s their choice. Those who want to avoid becoming caught up inadvertently in united front operations will need to exercise due diligence before accepting an invitation to officiate at Chinese-Australian community functions with United Front Work Department ties.

Most Chinese-Australian community organisations provide valuable services to the communities they serve. Some, however, are susceptible to United Front manipulation. How can we tell one from another? See box.

By the author

There are a number of general rules that help indicate whether a community organisation is likely to be targeted under the party’s united front strategy.

Ask. The simplest way is to ask Chinese-Australian friends and acquaintances, who are generally well aware of which organisations to trust and which are best avoided. Some associations that were once regarded as trustworthy and independent have come under the influence of consular officials. Local knowledge helps to identify them.20 

Check. Another is to check online to see whether an organisation has already been named in association with united front activities. A quick web search would reveal that organisations with ‘peaceful reunification of China’ in their title are likely to be connected to the United Front Work Department in Beijing, and that several other city and state organisations have been identified as working in close association with China’s consulates in Australia to pursue the party’s strategic objectives. Some have been identified in submissions to federal parliament that are available online.21

Confirm. As a general rule-of-thumb, a place-name community association founded in recent decades that is named after a city, town or province in China, and actively hosts official visiting delegations from China, is likely to be in close communication with local communist party officials in the nominated place to service their needs and pursue their interests in Australia. Even when not set up for this purpose, local place name associations are often approached by party officials to act as united front partners.

Independent social organisations are basically outlawed within China, and outside China’s borders they’re viewed with deep suspicion. Chinese Government officials do not generally patronise organisations that they cannot predictably influence in their favour.

Local Chinese-language media are another vehicle the CCP employs to garner support, silence opposition and drive a wedge into Chinese-Australian communities. The international propaganda arms of the CCP have majority ownership and control of almost all Chinese-language radio stations in Australia through state-run China Radio International’s holdings in Melbourne-based CAMG.22 Arms of the CCP also control the majority of Chinese-language print media through various advertising and commercial deals, in some cases producing content in China for placement in Australian media.23

Content that appears on social media using China-based platforms such as WeChat and Weibo is strictly monitored and controlled by authorities in Beijing.24 Conversations over WeChat among Australians within Australia are commonly censored by authorities in China.25

Foreign state ownership or control of media, and the placement of foreign state content in Australian media, are subject to registration and reporting consistent with the Foreign Influence Transparency Scheme (FITS) legislation. However, censorship and misinformation activities undertaken by foreign governments through independent media and social media aren’t all covered by FITS legislation.

Each of these CCP operations in Chinese-Australian media and community affairs forms part of a united front strategy to persuade people of Chinese descent, whatever their country of citizenship, that they owe loyalty to the CCP. Many Chinese-Australians strongly object to that presumption.

Still, the party claims success for its united front work because of its ability to draw on ‘a wide range of people of Chinese descent in China and overseas to promote the reform and development of the country and defend the country’s core interests’.26 According to senior party officials, China’s ‘number one core interest’ is keeping themselves and their party in power,27 so securing loyalty to the leadership of the CCP among Chinese nationals overseas and ethnic Chinese citizens of other countries remains a fundamental premise of the party’s united front diplomacy in Australia, however infuriating that may appear to many Chinese-Australians.

Public diplomacy, Australia style

The party’s united front work among Chinese overseas is a Leninist variant of a widely accepted form of diplomacy known as ‘diaspora diplomacy’.28 Diplomacy targeting diaspora communities overseas is undertaken by many countries with large émigré populations, including Ireland, Israel, Italy and India, as well as China. The Indian Government runs an active diaspora diplomacy program that reaches out to around 600,000 people of Indian descent in Australia. Unlike authorities in Beijing, however, the Indian Government draws a clear distinction between Indian and foreign citizens among the Indian diaspora and it does not as a rule associate loyalty to India with loyalty to the party in power.29

The Australian Government also operates diaspora diplomacy programs, reaching out to Australian citizens overseas to foster trade and investment and promote Australia as a diverse and inclusive liberal democracy.30 Australian public diplomacy reflects Australian national values and interests, and changes periodically in response to new challenges, but one constant is the ideal of Australia as a diverse and inclusive liberal democracy.

For many years, the Australian Government set aside possible concerns about conflicting values and diverging strategic interests in dealing with the communist government of China in order to promote trade and investment and people-to-people ties in a spirit of mutual goodwill. Although partly a matter of courtesy, that approach reflected a hard-headed judgement of the risks and opportunities surrounding relations with a China at a time when the government in Beijing was committed to domestic reforms and international openness.

That judgement is currently under revision because its underlying assumptions no longer appear tenable. The Chinese Government’s occupation and militarisation of disputed territories in the South China Sea has undermined Australian faith in China’s commitment to the rules-based order. China’s hostile cyber intrusions into Australia, its interference in political parties and community organisations, and its implied threats of trade retaliation if Australian governments speak or act in defence of their sovereignty and interests, have together eroded a store of goodwill built up over many decades. And its handling of domestic issues, including the mass internment of Uyghur and other Muslim minorities in Xinjiang, has further eroded trust in Xi Jinping’s China. Lowy Institute polling indicates that many Australians no longer trust China to act responsibly in the world.31

The language of Australian foreign policy is being refashioned to reflect this changing strategic picture, along with changing public sentiment in Australia. The refashioning has involved reviewing longstanding assumptions about national security and prosperity and reframing the link between values and interests as they bear on China, and more particularly on China’s single-party state and its domestic and international operations.

Values were long distinguished from interests in Australian public diplomacy on the understanding that, while values may be unchanging, national economic and strategic interests are always open to negotiation. So, when the Australian and Chinese governments entered into negotiations over trade, investment and related matters, they each agreed to leave their values at the door. This well-established convention ceased to make sense once China’s government began testing Australia’s commitment to the defence of Australia’s values and sovereignty at home through interference operations on Australian soil. Community push-back in defence of basic values and freedoms provided a timely reminder to a democratic government that values are anchored not in foreign policy documents but in civic life.

The revised terms of Australian foreign policy engagement were clearly enunciated in the Turnbull government’s 2017 Foreign Policy White Paper. In this important statement, national identity was associated explicitly with liberal-democratic values, and the national interest was extended to include upholding the core values of political, economic and religious freedom, liberal democracy, the rule of law, racial and gender equality and mutual respect.32

Acknowledging Chinese-Australian concerns

The principles of racial equality and mutual respect apply to Australian governments and citizens just as they do to the governments and peoples of other countries. Australia espouses these principles domestically as part of its inclusive multicultural ethos. If Australian governments fail to live up to the principles they profess, their capacity to promote their values abroad is likely to be compromised. It follows that statements of concern about foreign government interference shouldn’t lead to the racial profiling of Australians with cultural or heritage links to those countries.

Unless carefully managed, otherwise well-founded media reporting on the CCP’s influence and interference operations in Australia could inadvertently target Chinese-Australian communities. One widely reported vector of foreign government interference in Chinese-Australian community affairs is the body of community associations that have been sponsored or persuaded by Chinese Government agencies to act on Beijing’s behalf in Australia. A second is Chinese-language media platforms that have been bought out or financially compromised by Chinese Government agencies. A third involves donations to political parties and funding to universities to leverage influence improperly in support of Chinese Government positions on geopolitical issues.

Some community leaders have expressed concern that mainstream media reports on these issues and associated government legislation together risk targeting Chinese-Australians as agents of a foreign power. Dr Anthony Pun, OAM, National President of the Chinese Community Council of Australia, wrote on 17 April 2019 that China’s critics in Australia were ‘publishing anti-Chinese prejudice’ and warned that ‘insidious anti-Chinese sentiments’ were targeting Chinese-Australians irrespective of their status or their politics.33 Responding to federal legislation limiting foreign interference, former Victorian Labor parliamentarian Hong Lim was reported in March as saying ‘we found the bill condescending, patronising and insulting to the Chinese community. Our only crime is to be born Chinese.’34 These concerns and those of other leaders of Chinese-Australian community organisations deserve respect. Along with other Australians, Chinese-Australians are entitled to express their views on any matter, including views for and against the claims and conduct of China’s communist party government, and they should feel free do so without fear of being tainted as agents of a foreign government.

At the same time, a number of Chinese-Australian community groups have applauded media exposure of Beijing’s interference activities in Australia and welcomed the Australian Government’s legislative response. They include Chinese-Australian religious organisations, community media outlets, democracy activists, and groups representing minorities in China subject to Chinese Government intimidation and harassment in Australia. Some point to claims that Chinese Government officials engage in allegations of racism in order to drive a wedge between communities in Australia.35 All concerns arising from confusion between improper Chinese Government interference in Australia on the one side and legitimate Chinese-Australian community organisation, publication and political activity on the other need to be addressed and allayed.

Acting as an agent of a foreign government isn’t in any case illegal in Australia. Australians are at liberty to advocate the views and interests of a foreign government in return for material benefits for themselves, their families, their businesses or their community organisations. Those who do so, however, need to register their interest under the FITS registration process.

Mitigating risks through language

The risk of anti-Chinese racism can never be discounted, but neither can risks of foreign government interference in local community affairs. Both sets of risks need to be acknowledged and managed appropriately.

More careful use of language in distinguishing between the legitimate cultural attachments of minority populations and the interests of foreign governments can go some way towards mitigating those risks. Clarity and consistency are essential for avoiding misunderstanding or inadvertently causing offence through sloppy language use.

The fact is that everyday English can be very confusing when it comes to speaking and writing about China and matters Chinese. Add common problems of translation and the potential for misunderstanding is considerable, as words that appear the same do not in fact have identical meanings.

For example, the English word ‘Chinese’ can refer to anything relating to the country of China, including its language, society and culture, as well as a host of things derived from China, such as food, religion, music and so on, and also to distinct categories of people, including Chinese citizens, people of Chinese descent and ethnic Chinese nationals of other countries. Depending on context, ‘Chinese’ can mean any or many of the above, and this can be very confusing for non-native speakers of English.

In the national Chinese language there are different words or phrases for many of these distinct concepts and categories. The word Zhongguo refers to China or something relating to that country. Hence, the word Zhongguoren refers to Chinese nationals. This isn’t the same as the word for people of Chinese descent, which is huaren. A different term again, huayi, is prefixed to the names of other countries to refer to people of Chinese descent who are citizens of other countries, so huayi Aozhouren refers to Chinese-Australians. In the national Chinese language, the word ‘Chinese’ in ‘Chinese-Australian’ is completely different from the word ‘Chinese’ in ‘Chinese citizen’. Rightly so, as one is Australian and the other a citizen of China. Yet in English the one word can mean both.

These important distinctions are obscured in English to the point where people unaware of them can be misled into thinking ‘Chinese’ means any or all of these things at once. Conversely, people who read Chinese or speak its many dialects might not be clear about which of those meanings applies when they come across the word ‘Chinese’ in English. Either way, misunderstandings about the word ‘Chinese’ can lead to confusion and rancour.

Perils of translation – the author

Analysing the inflationary impact of an outbreak of swine fever among pigs in China in June 2019, UBS market analyst Paul Donovan referred to ‘Chinese pigs’. Social media netizens in China misread his reference to animals as a reference to people. State media confirmed their reading and called for swift action to correct this ‘racist’ slur on the Chinese people, and the party’s Global Times reported calls for an official apology from UBS. UBS shares fell on reports of the misunderstanding.

Global Times Verified account @globaltimesnews

FollowFollow @globaltimesnews

#BREAKING UBS chief global economist Paul Donovan used distasteful and racist language to analyze China’s inflation in a recent UBS report, sparking uproar across Chinese social media. Chinese netizens called for an official apology from #UBS.

10:16 pm – 12 Jun 2019.

‘China’ is clear enough, but the word ‘Chinese’ is so vague that it’s best avoided as a stand-alone word. Precision is preferable: best refer to the people of China, or the culture of China, or to chickens or flowers in China, or Chinese-Canadians and Chinese-Australians.

The Government of China gives additional ground for caution over the use of the word ‘Chinese’ when it attributes criticism of its human rights record to ‘anti-Chinese’ bigotry in its Chinese-language propaganda. The word for ‘anti-Chinese’ (fanhua) alludes to historical anti-Chinese racism predating the CCP’s takeover of China.36

This is an especially powerful term in the party’s united front armoury that carries considerable weight among Chinese-speaking communities that have experienced historical racism overseas. The use of the term in Chinese Government communications is intended to suggest that the party’s foreign critics should be ignored, if not silenced, because they’re blinded by bigotry and bias.

Wedging race on campus – the author

TIn July 2019, violence broke out on the University of Queensland (UQ) campus when a group of students supporting the Government of China attacked another group protesting in sympathy with Chinese citizens voicing criticism of the government, including a million and more democracy demonstrators in Hong Kong and relatives of Uyghur and Muslim minorities undergoing forced ‘re-education’ in Xinjiang.

China’s Consulate-General in Brisbane issued a Chinese-language statement about the UQ student violence on its website to inform people of Chinese descent in Australia.37 In Chinese script, the consulate applauded those who initiated the violence for their ‘patriotic behaviour’ and attributed blame to protesters harbouring ‘anti-China’ or ‘anti-Chinese’ sentiments. The word used here (fanhua) is ambiguous, but outside of China it generally refers to ethnic discrimination against people of Chinese descent.

The consulate’s framing of the student demonstrations as a problem of ‘anti-China/Chinese’ discrimination was picked up by sympathetic community organisations in Sydney and Melbourne. Promotional material for a pro-Beijing demonstration scheduled for the Sydney CBD on 17 August began: ‘Have you ever felt discriminated against because of Hong Kong riots in Australia? Let’s SAY NO to discrimination! (让我们一起向歧视 SAY NO!).38 The cynicism was breathtaking: framing a political dispute as a form of ethnic discrimination, the pro-Beijing organisers invited visiting Chinese students and Chinese-Australians to tackle ‘discrimination’ in Australia by denouncing the Hong Kong student movement.

This approach is lifted straight out of the party’s united front playbook for wedging race issues to deflect criticism of the Beijing government’s human rights record: in working with people of Chinese descent around the world, divert attention from the real issues by attributing criticism of party policy to historical ‘anti-Chinese’ or ‘anti-China’ discrimination and then mobilise people to oppose alleged ‘discrimination’.39

The English word ‘Chinese’ can also be confusing to Chinese-Australians. Sloppy use of the word can appear to question the loyalty of Australian citizens of Chinese descent who prefer to be known as Australians or, if need be, as Chinese-Australians, on the model of ‘Anglo-Australians’ or ‘Chinese-Canadians’, not as ‘Chinese’.

Imprecise language – the author

In the 2019 federal election, a candidate in Sydney appealed to Chinese-Australian voters in English through the dominant Chinese-language social media platform, WeChat:

Today I spent the afternoon consulting with my friend and mentor the Hon Bob Carr about his views on the disrespect for the Chinese people in the media over the last few years. He told me he thought the Prime Minister should do more to defend the Chinese people in Australia

  • WeChat respondents, writing in Chinese, complained that the candidate addressed them as ‘Chinese’ or ‘Chinese people’ when they considered themselves Australian. Translated, some of those WeChat responses read as follows:
  • ‘“Chinese people” means “Chinese people”. Not us, not Australians!’
  • ‘He is obviously not including me. I am an Australian.’
  • ‘If the parliamentarians I choose to elect are going to care more about Chinese people … then they can go to China and show their concern. We Australians need parliamentarians who are concerned about Australia.’

Source: Maree Ma reported on this WeChat incident on her Twitter account: online.

When it comes to writing or speaking about Chinese-Australians, it’s important to recognise the diversity of the communities embraced by the term. Not all come from China, by any means. And wherever they hail from, people can be sensitive about being mistaken for other nationalities—New Zealanders for Australians, for example, or Canadians for US citizens. Chinese-Australians want to be recognised first and foremost as Australians, while also being acknowledged being as diverse as the countries and regions from which they hail.

Jieh-Yung Lo, Chinese-Australian writer and political activist

Unfortunately for us, the diversity within our community is not fully understood by the majority of our politicians and political parties. Out of the 1.2 million Australians with Chinese heritage and ancestry, more than 500,000 were born in Mainland China while more than 700,000 were born in places such as Vietnam, Singapore, Malaysia, Taiwan, Cambodia, Hong Kong, Indonesia, Philippines and of course Australia. Such diversity also means not all Chinese Australians speak Chinese Mandarin.

Source: Jieh-Yung Lo, ‘To win our federal election vote, politicians should get to know the real Chinese-Australia’, ABC News, 15 May 2019, online.

The same principle applies to graphic representations. Placing the flag of the People’s Republic of China (PRC) above or alongside an article about Chinese-Australians makes several errors at once. It associates people of Chinese descent with China, when a minority of Chinese-Australians come from the PRC, and it identifies Australian citizens of Chinese descent with the national flag of another country, China, when in fact they wave the Australian flag.

Wesa Chau, co-founder of Poliversity and Young Victorian of the Year 2010

By putting up the PRC flag in referencing Chinese-Australians, @GuardianAus just wrongly accused the Chinese Communist Party of meddling in Australian domestic politics. #auspol #ausvotes2019

Source: Wesa Chau, Twitter, 19 April 2019, online

Chinese-Australians are generally well informed about China, Australia and world affairs and want to be acknowledged and included in national conversations about China and Australia’s relations with that country. Australia would benefit if all Chinese-Australians felt equally welcome to participate in public affairs as well as in the business and cultural life of the country. Chinese-Australians are an indispensable part of the solution to CCP interference in Australian affairs.

Prime Minister Malcom Turnbull, 2017

We are focused on the activities of foreign states and their agents in Australia and not the loyalties of Australians who happen to be from a foreign country. There is no place for racism or xenophobia in our country. Our diaspora communities are part of the solution, not the problem. To think otherwise would be not only wrong and divisive but also folly—in a nation where most of us come from migrant families and one in four of us was born overseas.

Source: Malcom Turnbull, ‘Speech introducing the National Security Legislation Amendment (Espionage and Foreign Interference) Bill 2017’, 7 December 2017, online.

In reaching out to Chinese-Australians, caution is advised on the reach and limitations of China-based social media such as WeChat and Weibo. Their use among Australians is largely confined to immigrants from the PRC, and conversations among Australians on those platforms are known to be monitored and censored by China’s censorship authorities. Getting to know people and becoming familiar with how they communicate with one another is far preferable. Precision is also required when speaking or writing about China itself. Is the subject the Government of China, the CCP or the people, culture or society of China? This matters for reasons of accuracy and fairness. When we speak or write about the US, France or Australia, we generally differentiate parties and governments from societies and nations. A country as diverse as China deserves no less.

Rowan Callick, former China correspondent and Asia–Pacific editor with The Australian and The Australian Financial Review

Whenever I speak or write about China, I always take care to indicate whether I am referring to the Government of China, the Chinese communist party, or the people of China or Chinese society.

Some party types in China don’t like this because they insist that the party and the people are one and the same, that you can’t put two hairs between them, but that does not help Australians understand the nuances of our relations with China.

Source: Correspondence with the author.

Many Australians who welcome China’s rise have serious and well-founded misgivings about the CCP and its authoritarian style of government. This distinction is also worth making clear.

Peter Varghese, former Secretary of the Department of Foreign Affairs and Trade

For Australia, a democratic China becoming the predominant power in the Indo Pacific is a very different proposition to an authoritarian China occupying this position.

Source: Peter Varghese, ‘The Indo Pacific and its strategic challenges: an Australian perspective’, presentation to the Institute of South East Asian Studies, Singapore, 8 January 2019.

It also helps to be clear about the issues under discussion. A number of aspiring politicians and radio shock-jocks talk of ‘Chinese’ taking over the country. Much of the heat around this claim emanates from housing affordability. There’s no denying that buying a house or apartment can be a challenge for anyone wanting to enter the housing market in Australia’s larger metropolitan centres, but there’s no reliable evidence showing that existing residential housing has been placed beyond reach by purchases on the part of foreign nationals. By law, all Australians, including Asian-Australians, are equally entitled to acquire residential property. Foreign nationals may acquire new dwellings or vacant residential land. In the absence of substantial evidence, claims that ‘Asians’ or ‘Chinese’ are pushing others out of the market for existing housing stock are empirically wrong and prima facie discriminatory.

Similar claims are sometimes made about ‘Chinese’ buying up rural properties. Foreign nationals are entitled to purchase rural property subject to federal government review in the case of large or sensitive holdings. Unless reasonable grounds for concern are put forward, singling foreign nationals of one country out for criticism over rural property purchases is blatantly discriminatory.

Hans Hendrischke and Wei Li, University of Sydney

The scale of Chinese* investment in the Australian residential property market continues to polarise public opinion. Chinese buyers are often blamed for driving up house prices in Australia and causing the current affordability crisis. However, Chinese offshore purchases are surprisingly low. Based on Foreign Investment Review Board (FIRB) approval figures, ABS data, and our own data on actual Chinese investment in commercial real estate, we estimate Chinese residential real estate investment totals around 2% of all residential real estate transactions in Australia. Based on (2014) FIRB data, overall foreign investment accounts for 13.4% … of total residential real estate investment, while Chinese residential investment in the Australian real estate market lies near the 2% mark. Before suggesting Chinese investors are a major factor behind declining affordability, commentators should at least consider the data. Based on the data we do have, Chinese investment in Australian residential real estate accounts for just 2% of the total real estate sales volume. Chinese applicants for residential real estate investment approval account for one sixth or 16% of potential foreign real estate investors. This suggests the housing and housing affordability crisis will not be solved by a clamp-down on one group of buyers. *‘Chinese’ refers to citizens of China or corporate entities registered in that country.

Source: Excerpted from Hans Hendrischke, Wei Li, ‘Chinese investment in residential real estate amounts to just 2%’, The Conversation, 14 September 2015, online.

Conclusion

Global challenges, including terrorism and authoritarian state behaviours, are compelling immigrant countries around the world to reflect carefully on the challenges of maintaining ethnocultural diversity and supporting community attachments to former homelands, on the one hand, while maintaining national security and social cohesion on the other.

In Australia, the focus of recent concern has been China. In fact, concerns over foreign or Asian property ownership are neither new to Australia nor confined to purchasers from China. In the 1980s and 1990s, similar fears were expressed about residential and commercial property purchases by Japanese nationals. Neither concern has been well founded.

Similarly, the CCP isn’t alone in reaching out to diaspora communities based in other countries. Yet here the similarity ends.

The party’s united front diplomacy gives particular grounds for concern where it reaches out to people of Chinese descent regardless of citizenship, demands their loyalty to the party, and engages in covert and coercive behaviour to silence Chinese-Australians who harbour deep affection for China but none for the party.

Australians who are concerned that public conversations about China’s influence and interference operations in Australia could adversely affect Chinese-Australian communities can help mitigate risks by heeding the many voices to be heard among those communities, by cultivating respect among all Australians for minority rights and freedoms, by working for greater minority inclusion in senior positions and peak bodies and councils, and by taking the time to be more thoughtful about what they say and how and where they say it.

While the risks of fanning anti-Chinese racism through criticism of Chinese government behaviour are real, so are the challenges arising from a foreign government exploiting sensitivities over ethnic identity and cohesion in Australia’s multicultural society as a cover for interference in public life and community affairs.

Both sets of risks require Australia’s education systems and civil society to deal sensitively with intercultural issues and require Australia’s diplomatic and political representatives to defend Australian national interests in ways that don’t jeopardise the social standing of minority communities or damage social harmony. The ongoing challenge from a more confident and confrontational government in China will require firm and principled approaches from Australians for many years to come, expressed in clear and unambiguous language.

ASPI International Cyber Policy Centre

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