Producing policy-relevant China research and analysis in an era of strategic competition

This brief report explores the challenge of producing policy-relevant China research and analysis. Policy-relevant research is defined as work that drives action, affects decision-making, or both. It’s the kind of research think tanks seek to do, bridging the gap between academia and civil servants who work on policy.

This paper focuses on two key findings:

  1. There’s a distinction between conducting policy-relevant research and the process of disseminating it in a way that will effectively shape and influence the policy process in particular places by particular policy- and decision-makers. In practice, the difference between the two isn’t always clearly understood and perhaps not clearly taught.
  2. There’s limited training that prepares the China analytical community to deal with the challenges of producing policy-relevant research under conditions of restricted access to China. Researchers require more support in navigating the research environment and filling skill-set gaps.

The geopolitics of climate and security in the Indo-Pacific

Climate change is much more than an environmental crisis—it’s a systemic crisis that will transform the geopolitical landscape. And the consequences for the Indo-Pacific, already the most exposed region in the world to climate hazards and home to the world’s fastest growing populations, economies and geopolitical rivalries, will be profound.

In this volume, leading experts explore the impacts of this rapidly emerging climate threat on regional systems by interrogating a 1.5°C 2035 climate change scenario developed by the ASPI Climate and Security Policy Centre.

The chapters here attempt to understand the unpredictable effects of climate change on the region’s already fragile human systems, from great-power competition and militaries, governance and politics, food and water insecurity, and ethnic separatism, to energy and trade systems, sovereign risk and digital disinformation.

What emerges is a vivid demonstration of the dangers of underestimating the systemic connections between those factors, including how risks in one thematic area amplify risks in others, completely reshaping the regional security picture.

Watch the publication launch event.

The future of assistance to law enforcement in an end-to-end encrypted world

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Domestic telecommunications companies assist law enforcement by the lawful interception of otherwise private communications when presented with a valid warrant.

This has been a powerful tool to combat crime. In the 2019–20 financial year, for example, 3,677 new warrants for telecommunications interception were issued, and information gained through interception warrants was used in 2,685 arrests, 5,219 prosecutions and 2,652 convictions. That was in the context of 43,189 custodial sentences in the same year.

But law enforcement and security officials assert that the usefulness of ‘exceptional access’, as it’s called in this paper, has declined over time as strong encryption has become increasingly common.

Australian Security Intelligence Organisation (ASIO) Director-General Michael Burgess has stated that encryption ‘damages intelligence coverage’ in 97% of ASIO’s priority counter-intelligence cases.

The problem of increasingly powerful encryption degrading the usefulness of exceptional access is often referred to as ‘going dark’.

The Australian Government has committed to the reform of Australia’s electronic surveillance legislative framework.5 Although its discussion paper mentions encryption only in passing,6 we can expect that encryption and going dark will be a topic of debate as reform is considered. This paper contributes to that debate by examining how firms that provide digital communications services can provide assistance to law enforcement even as strong encryption is increasingly common.

Although exceptional access is primarily concerned with evidence collection, it may be better in some cases to focus on crime prevention, when it comes to achieving society’s broader aim of safety and security. This may be especially true for serious offences that cause significant harms to individuals, such as child exploitation and terrorism.

Accordingly, in this paper I divide assistance to law enforcement into two broad types: 

  1. Building communications services so that criminal harm and abuse that occur on the service can be detected and addressed, or doesn’t even occur in the first place. Examples of harms that might be avoided include cyberbullying or child exploitation that occur online.
  2. Assisting law enforcement with exceptional access for crimes that are unrelated to the communications service. Examples of such crimes might include an encrypted messaging service being used to organise drug smuggling or corruption.

I start by exploring the justification for exceptional access and then examine how encryption has affected assistance to law enforcement, as well as the differences between transport encryption and end-to-end (E2E) encryption and the implications those differences have for law enforcement.

I examine encryption trends and discuss the costs and benefits of exceptional access schemes.

I then examine some of the approaches that can be used by service providers to provide these two different forms of assistance as E2E encryption becomes increasingly common. I also summarise some of the advantages and disadvantages of those different approaches.

A number of initiatives seek to embed safety and security into the design, development and deployment of services. They encourage industry to take a proactive and preventive approach to user safety and seek to balance and effectively manage privacy, safety and security requirements. Those initiatives have relatively few big-picture privacy or security drawbacks, but there are many issues on which there isn’t yet consensus on how to design platforms safely. Such initiatives may also need extensive resources for employee trust and safety teams.

Providing law enforcement access to E2E encrypted systems is very challenging. Proposals that allow access bring with them some potentially significant risks that exceptional access mechanisms will be abused by malicious actors.

Watch the launch webinar here.

Meeting Antarctica’s diplomatic challenges: Joint approaches for Australia and the United States

This report describes current security and environmental policy challenges related to Antarctica and proposes options for Australia and the United States to address them. It assesses the current and potential future actions of strategic competitors like China and Russia, and proposes policy responses.

It suggests ways in which the US and Australian governments can work more closely to protect and promote the Antarctic Treaty System (ATS), advancing support for an approach to governance that the two nations have felt for decades is in their respective national interests. This requires both countries (as well as others) to make a clear-eyed assessment of current and future fault lines and move more quickly to address political and environmental challenges that have implications well beyond Antarctica. In particular, this involves determining when it’s necessary to counter the ambitions of strategic competitors, such as China and Russia, in the Antarctic context, and when cooperation may be the more appropriate objective.

The current Antarctic governance regime, while far from perfect… achieves a great deal that’s in the long-term national interests of Australia and the US. The ATS shouldn’t be dismissed as out of date; it can still be effective in addressing core regional concerns of both countries. Both countries can use their influence to insist on the implementation by all countries of ATS rules and can invoke those rules to fight for environmental protection and policies that support scientists. It’s unlikely that a more effective set of treaties could be negotiated today. Australia and the US should spend more time at both senior and working levels to coordinate positions and on outreach to other governments on Antarctic issues.

Taking the low road: China’s influence in Australian states and territories

In November 2020 a Chinese official passed a list of 14 grievances to Australian journalists, highlighting what Beijing regarded as missteps in the Australian government’s relations with China. A striking feature of the list is that many concern Australian Government attempts to limit Chinese engagement with the states and territories, or state-based institutions such as universities.

Why did state and territory relations with China concern Canberra? This study explores the changing nature of China’s engagement with Australian states and territories, local governments, city councils, universities, research organisations and non-government organisations, all nested in Australian civil society. What emerges is the astonishing breadth and depth of China’s engagement, much of it the welcome outcome of Australia’s economic and people-to-people engagement with China over many decades. But it’s equally apparent that China has made covert attempts to influence some politicians and overt attempts to engage states, territories and key institutions in ways that challenge federal government prerogatives and have brought the two levels of government into sharp public dispute.

Here we provide a detailed analysis of how China has worked to build its political influence and build dependence through trade and economic ties with each Australian state and territory. In addition, unique cross-cutting chapters review the impact of Chinese engagement with Australian universities and show how Beijing’s ‘United front’ organisation is designed to build influence. We assess the impact on Australian businesses and the constitutional challenges presented by Chinese engagement with the states and territories.

The study methods and analytical approaches adopted in this book will be a model for similar research in many parts of the world. Understanding the nature of Chinese engagement with subnational jurisdictions is an important way for national governments to shape their security policies and to resist covert and, indeed, unwanted overt interference.

This book provides original insights into the scale of the challenge and distils practical policy recommendations for governments at all levels to consider and adopt.

Launch Webinar

The costs of discounted diplomacy

This report outlines how and why Australia has under-appreciated diplomacy and under-invested in diplomatic capability—and why things should change.

The prominence of deterrence, alliances and border controls in Australian security thinking has pushed diplomacy into the shadows.

Over the last twenty years, Australian governments, sensibly, have invested massively in defence, intelligence and border control. Over the same period, though, the operating budget for DFAT’s foreign policy and diplomatic work, has been cut by 9 per cent.

In a more contested and multipolar international environment, lightweight diplomacy reflects lightweight thinking. Australia will be safer, richer, better regarded and more self-respecting if our diplomatic influence is enlarged, not if it remains stunted.

A properly funded DFAT can improve the government’s understanding of the motivations, intentions and capabilities of others, and help the government to develop policies and coalitions that enable Australia to navigate risks and exploit opportunities.

The report recommends that the government prepare a comprehensive capability assessment for DFAT, followed by a financial plan to match capability needs.

The report will help analysts calculate whether governments are increasing or decreasing the critical operating budget for DFAT’s policy function—an important bellwether of their commitment to the role of diplomacy in Australia’s national security.

Digital Southeast Asia

Opportunities for Australia–India cooperation to support the region in the post-Covid-19 context

What’s the problem?

Covid-19 and the subsequent public-health responses have disrupted social and economic lives across the globe. Fiscal support measures may have alleviated the initial fallout in some places, but one of the bigger shocks has been the accelerated adoption and integration of and reliance on digital technologies. While this is a positive contribution towards digital development, it has also accentuated the already large gap between those able to adopt digital technologies and those without sufficient means to do so.

For the many fragile democracies in the Indo-Pacific, this is creating conditions that could undermine democratic resilience. A central question for these democratic governments is how to drive accelerating digital transformation and ICT-enabled growth towards poverty reduction, sustainable economic growth and building social cohesion while maintaining resilience to cybersecurity threats.

Southeast Asians are exceptional consumers of online goods and services. The region is also home to a growing number of technology start-ups, and governments are pushing this ‘drive for digital’ through ambitious national strategies. Despite those positives, digital growth within the region and within individual economies is uneven.

Human capital is a central driver of poverty reduction, sustainable growth and social cohesion,1 but, in Southeast Asia, digital literacy and skills are lagging behind usage and infrastructure. The adoption of technology is progressing, but problems of affordability, connectivity and coverage remain. There’s a limit to the growth trajectory due to weak demand from micro, small and medium-sized enterprises (MSMEs) that don’t have the means, skills or opportunities to adopt or integrate digital technologies.

This is particularly affecting the livelihoods of non-metropolitan communities, women, MSMEs and those whose jobs may be affected by the introduction of technology and automation.

The digital divide and rising inequality are now the everyday bromides of earnest policymakers. But the phrases have become policy cliches, stripped of meaning, with no sense of the underlying dynamics at play, making the prospects for any viable solutions slim. The Covid-19 pandemic has offered a harsh look at the role of the digital divide in driving inequality and the unedifying future that lies ahead as major technological advances compound and permanently entrench inequality.
— Huong Le Thu, ‘Investing in Southeast Asia’s tech future’, in The Sydney Dialogue: playbook, 20212

Since the outbreak of Covid-19 in early 2020, digital adoption has further accelerated and driven greater demand for online services in retail, education and health. However, the pandemic has also contributed to the further widening of pre-existing digital divides. Women have been disproportionately affected, as many are employed in the informal and ‘gig economy’ sectors, which were hit hard by lockdowns. The pandemic has also further exposed more users to cybersecurity and online safety risks in an environment in which practices of cyber hygiene are generally poor.

As a result, the region is now faced with a dual transformation challenge: how can we stimulate further digital development while ensuring that future growth is inclusive?

What’s the solution?

This report recommends Australia and India leverage their bilateral partnership in cyber and critical technologies to support inclusive digital development in Southeast Asia, and strengthen the foundations of Southeast Asia’s digital economy.

The governments of Australia and India should take a more coordinated approach to their digital engagements with Southeast Asian countries, and further consider establishing a Joint Working Group on Digital Engagement to bring together like-minded partners.

Given that India and Australia face digital development challenges that are similar to Southeast Asia, an Australia-India spearheaded cooperation should be approached through a troika-type collaboration with Southeast Asian partners. This collaboration should look to address the region’s digital skills shortage, improve cyber resilience and contribute to digital public infrastructure. This requires a multi-stakeholder effort involving governments, the private sector, civil society and the technical community.

A priority area for additional support are efforts that enhance the digital knowledge and digital business skills of the Southeast Asian workforce. International initiatives should seek to augment or connect with existing local digital skilling programs. Specific areas of focus for Australia and India could include support to female digital entrepreneurship, and improvement of access to online courses and training to upskill MSMEs.

To improve cyber resilience operationally, Australia and India could strengthen and deepen relationships with Southeast Asia’s national cybersecurity agencies and national Computer Emergency Response Teams by exploring ways to share collective resources, expertise and experiences more effectively and more widely across each country’s economic sectors and non-metro areas.

At a strategic level, through the Australia-India Joint Working Group on Cyber Security Cooperation, the two countries could consider the possibility of sharing strategic assessments of the regional cyber threat landscape with Southeast Asian partners.

Finally, India and Australia should explore regional marketplaces for digital public goods and infrastructure which could offer further business incentives to digital, technology and cybersecurity communities in Australia, India and Southeast Asia.

Introduction

Southeast Asia is home to one of the world’s fastest growing markets of internet users. Pre-pandemic, there was enormous optimism about the growth of Southeast Asia’s digital economy. Estimates from 2019 showed a trajectory that would triple its US$100 billion internet economy by 2025.3 During the first year of the Covid-19 pandemic, the region’s internet economy gained more traction, and even achieved double-figure growth in Vietnam and Indonesia.4

Today, the region continues to struggle with new and more contagious variants of the virus, as the majority of the region’s population remains unvaccinated.5 Economic hardship, overburdened health systems and, in some cases, repressive public-order responses are posing challenges to political stability and societal resilience. As a consequence, when combined with the effects of climate change, there’s uncertainty about the long-term economic and social effects and the shape and speed of economic recovery.

Digital technologies6 are playing an integral part not just for contact tracing or getting public-health messages out into the community but also as a driving force for post-pandemic economic recovery. For years, governments in Southeast Asia have been pursuing ambitious digital transformation agendas that have laid a foundation for their emerging digital economies. In a post-Covid world, international partnerships of governments, industry and civil society organisations, such as between India, Australia and Southeast Asia, could form a key element in the region’s digital economic recovery and help set digital standards and norms.

Focusing on Indonesia, Malaysia, the Philippines, Thailand and Vietnam, which are some of the region’s largest and emerging technology-enabled economies, this report explores what efforts can be made by an Australia–India collaboration to support Southeast Asia’s digital capacity and resilience in the aftermath of the Covid-19 crisis. Collaboration between Australia and India in the area of cyber and critical technology is an emerging partnership that brings opportunities for strengthening both countries’ digital cooperation with Southeast Asian partners.

What are the digital economy, digital transformation and Industry 4.0?

There’s no agreed definition or framework that defines the digital economy. Different frameworks highlight, to varying degrees, macro policy foundations (such as competition, trade, governance), digital enablers (infrastructure, platform policies, skills, finance) and sectoral transformation (such as ICT applications in key economic sectors such as public services).7

Digital economy frameworks rarely consider the whole digital ecosystem and its interaction with the rest of the economy. The Asian Development Bank, for instance, has introduced the term ‘core digital economy’,8 which it defines as the contribution to GDP of any economic transaction involving both digital products and digital industries. In this report, we also consider wider aspects within the digital economy, including gender and inclusion.

Digital transformation refers to the process of moving from analogue to digital processes, integrating technology into working processes and, in its most advanced stages, doing so under the guidance of a strategy.

Industry 4.0 or the ‘fourth industrial revolution’ (4IR) refers to the application in industry of the convergence of physical and digital technologies. This can include artificial intelligence, machine learning, ‘internet of things’ (IoT) devices, advanced robotics, augmented reality, cloud computing, big data and analytics, and 3D printing.

The first section of the report reviews the enablers and attendant challenges of Southeast Asia’s digital economy, such as the supply of infrastructure, demand for digital services and general uptake of technology by individuals and businesses. In addition, it looks at intersecting policy issues that enable, support and sustain digital transformation, such as inclusivity; skills and talent; online security and safety; and regulations and governance. It then touches upon the region’s adoption of advanced technologies such as 5G and artificial intelligence (AI) that could equally be enablers of the region’s next leap in digital transformation.

The second section offers an overview of the pandemic’s effects on Southeast Asia’s digital landscape. Although there’s been continued investment into digital infrastructure, it shows there are fundamental weaknesses in the rate of digital growth within MSMEs.

The third section looks at a troika type of collaboration between India, Southeast Asia and Australia. As the digital development challenges faced by Southeast Asia are equally relevant to Australia and India, we provide a selection of relevant skills, expertise and flagship programs that India and Australia could contribute to the region in a common effort to adapt to a digital future that’s free, open and secure.

Finally, this report concludes with a set of policy recommendations for Australia and India on areas in which they could extend meaningful and targeted support to Southeast Asia’s digital economic recovery.

Download Report

This report continues with chapters on;

  • The state of digital Southeast Asia in 2021
  • The impact of Covid-19 on Southeast Asia’s digital landscape
  • India-Australia and cyber and technology cooperation in Southeast Asia
  • Conclusion
  • Recommendations

Readers are warmly encouraged to download the full report.

Acknowledgements

ASPI and ORF would thank all of those who peer reviewed drafts of this report, including Arindrajit Basu and Akshay Mathur, for their valuable feedback. We would also like to acknowledge the contributions of Baani Grewal, Samyak Leekha, Antara Vats, Ariel Bogle, Karly Winkler and Albert Zhang to this report. We are also grateful to the individuals consulted across government, industry and academia, including participants at the Southeast Asia Internet Governance Forum and the ASPI-ORF-hosted Track 1.5 Dialogue on Digital Southeast Asia that helped to shape and focus this report.

This report was commissioned by the Australian Department of Foreign Affairs and Trade (DFAT). The work of ASPI ICPC wouldn’t be possible without the support of our partners and sponsors across governments, industry and civil society.

A draft of this report was shared with DFAT and valuable comments were incorporated, but, as with all our research, ASPI remains fully independent in the editorial judgements and policy recommendations made by our authors.

About the Observer Research Foundation

ORF seeks to lead and aid policy thinking towards building a strong and prosperous India in a fair and equitable world. It sees India as a country poised to play a leading role in the knowledge age—a role in which it shall be increasingly called upon to proactively ideate in order to shape global conversations, even as India sets course along its own trajectory of long-term sustainable growth. ORF helps discover and inform India’s choices. It carries Indian voices and ideas to forums shaping global debates. It provides non-partisan, independent, well-researched analyses and inputs to diverse decision-makers in governments, business communities and academia and to civil society around the world. Our mandate is to conduct in-depth research, provide inclusive platforms and invest in tomorrow’s thought leaders today. ORF’s website is at https://www.orfonline.org/.

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’s sources of funding are identified in our annual report, online at www.aspi.org.au and in the acknowledgements section of individual publications. ASPI remains independent in the content of the research and in all editorial judgements.

ASPI International Cyber Policy Centre

ASPI’s International Cyber Policy Centre (ICPC) is a leading voice in global debates on cyber, emerging and critical technologies, issues related to information and foreign interference and focuses on the impact these issues have on broader strategic policy. The centre has a growing mixture of expertise and skills with teams of researchers who concentrate on policy, technical analysis, information operations and disinformation, critical and emerging technologies, cyber capacity building, satellite analysis, surveillance and China-related issues.

The ICPC informs public debate in the Indo-Pacific region and supports public policy development by producing original, empirical, data-driven research. The ICPC enriches regional debates by collaborating with research institutes from around the world and by bringing leading global experts to Australia, including through fellowships. To develop capability in Australia and across the Indo-Pacific region, the ICPC has a capacity building team that conducts workshops, training programs and large-scale exercises for the public and private sectors.

We would like to thank all of those who support and contribute to the ICPC with their time, intellect and passion for the topics we work on. If you would like to support the work of the centre please contact: icpc@aspi.org.au

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 2022

This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Notwithstanding the above, educational institutions (including schools, independent colleges, universities and TAFEs) are granted permission to make copies of copyrighted works strictly for educational purposes without explicit permission from ASPI and free of charge.

First published February 2022. ISSN 2209-9689 (online). ISSN 2209-9670 (print). Cover image: Wes Mountain.

Funding Statement: Funding support for this publication was provided by the Australian Department of Foreign Affairs and Trade

  1. World Bank, The Human Capital Index 2020 update: human capital in the time of COVID-19, World Bank, Washington DC, 2020, online. ↩︎
  2. Huong Le Thu, ‘Investing in Southeast Asia’s tech future’, in: Fergus Hanson, Danielle Cave, Madeleine Nyst (eds), The Sydney Dialogue: playbook, ASPI, Canberra, 19 November 2021, online. ↩︎
  3. Google, Temasek, Bain & Company, e-Conomy SEA 2019, 2019, online; Cybersecurity in ASEAN: an urgent call to action, AT Kearney, 2018, online. ↩︎
  4. Google, Temasek, Bain & Company, e-Conomy SEA 2020, 2020, online. ↩︎
  5. ‘Share of people vaccinated against COVID-19, Jan 18, 2022’, Our World in Data, 2022, online. ↩︎
  6. ‘Digital technologies’ refers to the electronic tools, systems, devices and resources that generate, store or process data. Their use requires a level of understanding of how information and communication technologies work and a degree of skill to engage with and create technology applications. ↩︎
  7. Nagy K Hanna, ‘Assessing the digital economy: aims, frameworks, pilots, results, and lessons’, Journal of Innovation and Entrepreneurship, 2020, 9(16), online. ↩︎
  8. Asian Development Bank (ADB), Capturing the digital economy: a proposed measurement framework and its applications—a special supplement to Key Indicators for Asia and the Pacific 2021, ADB, Manila, August 2021, online. ↩︎

Agenda for change 2022: Shaping a different future for our nation

In line with previous Agenda for Change publications from 2016 and 2019, this piece is being released in anticipation of a federal election as a guide for the next government within its first months and over the full term. Our 2022 agenda acknowledges that an economically prosperous and socially cohesive Australia is a secure and resilient Australia.

ASPI’s Agenda for change 2019: strategic choices for the next government did, to a great extent, imagine a number of those challenges, including in Peter Jennings’ chapter on ‘The big strategic issues’. But a lot has changed since 2019. It was hard to imagine the dislocating impacts of the Black Summer fires, Covid-19 in 2020 and then the Delta and Omicron strains in 2021, trade coercion from an increasingly hostile China, or the increasingly uncertain security environment.

Fast forward to today and that also applies to the policies and programs we need to position us in a more uncertain and increasingly dangerous world.

Our Agenda for change 2022 acknowledges that what might have served us well in the past won’t serve us well in this world of disruption. In response, our authors propose a smaller number of big ideas to address the big challenges of today and the future. Under the themes of getting our house in order and Australia looking outward, Agenda for change 2022 focuses on addressing the strategic issues from 2021 and beyond.