China is stepping up efforts to force foreign companies to hand over valuable data while strengthening its own defences. Some of the information it’s looking for would give it greater opportunities for espionage or political interference in other countries.

Australia and other countries need to follow the lead of the United States, which on 21 October proposed rules that would regulate and even prohibit transfers of data containing the personal or medical information of its citizens to foreign entities.

Recent developments from inside China support the idea that the country is refocusing on bulk data, both to aid its intelligence operations and to protect itself from potential adversaries.

China has reformed its domestic legal environment to both protect itself and collect information with intelligence value. A new Data Security Law allows Chinese officials to broadly define ‘core state’ data and ‘important’ data while also banning any company operating inside China from providing data stored in China to overseas agencies without government approval. Firms over a certain size must also have a cell of the Chinese Communist Party to more closely integrate ‘Party leadership into all aspects of corporate governance’, including cybersecurity and data management.

The Communist Party’s Central Committee and the State Council have decreed that the National Data Administration will manage every source of public data by 2030.

The Ministry of State Security has prohibited Western companies from receiving geospatial information from Chinese companies and required companies to take down idle devices to reduce the threat of Western espionage. And Chinese nationals will shortly be unable to access the internet without verifying their identity by facial recognition and their national ID number.

In early October, a report by the Irish Council of Civil Liberties (ICCL) exposed the world of real-time bidding data, where the ads displayed when you go online are the result of an automated bidding process based on your browsing history and precise location. The ICCL report raised concerns that these kinds of analytics could identify people’s political leanings, sexual preferences, mental health state and even the drinks they like. That data has then been sold to companies operating in China.

Beijing’s recent activities in the digital world remind us that even the most mundane and trivial data about a person can have intelligence value—for example, in recruiting agents, guessing passwords and tracking the movements of targets. China’s expansive spying regime, which mobilises countless private entities and citizens, threatens to overwhelm Western intelligence services. That spying regime now has access to more information to inform decisions.

China’s latest moves draw our attention to the peculiar vulnerability of Australia in the region, especially among the AUKUS triad. Australian privacy law does not carry the same type of protections as British and US laws. Australia has neither a constitutional nor statutory right to privacy, and its key piece of legislative protection has provisions dating back to the 1980s. Despite receiving the results of a comprehensive review of the Privacy Act more than 18 months ago, the government has been sluggish to adopt any reforms that might help protect us from China’s data-harvesting practices.

The motivation for China to collect personal data in Australia has risen since we entered the AUKUS agreement in 2021. But the government isn’t showing enough interest in securing it against foreign manipulation and theft. Consider, too, that other intelligence players, such as India and Russia, are just as likely to join in.

Australia should take a leaf out of the US playbook on countering Chinese interference in its sovereign data. Since February 2024, the United States has been keen to regulate the sharing of information with foreign entities, starting with an executive order signed by President Joe Biden. The rules that Biden proposed on 21 October would ban data brokerage with foreign countries and only allow certain data to be shared with entities that adopt strict data security practices.

Beyond that, there is a growing need for industry and especially academia to adopt stronger security postures. Posting travel plans or political views on Facebook or Instagram might seem innocuous, but if it’s done by someone in a position of power or with access to valuable information, the individual’s vulnerability to espionage dramatically increases. As a society, we all need to take a little more notice and a little more care with what we are sharing online.

Indonesia’s new president, Prabowo Subianto, needed only three weeks in office to make three big concessions to China.

In a joint statement with President Xi Jinping in Beijing on 9 November, Prabowo acknowledged Chinese maritime claims that Indonesia had long rejected. Despite leading the most populous Muslim-majority country, he affirmed China’s right to deal with Xinjiang as it pleased. He also endorsed China’s vague vision of the geopolitical order, something that Indonesia has long been wary of.

Indonesia has long rejected China’s nearby territorial assertions in the South China Sea, arguing that they have no basis under the United Nations Convention on the Law of the Sea. A 2016 Permanent Court of Arbitration ruling against China, which declared its claims illegitimate, became the basis for Indonesia’s campaign against the nine-dash line.

That hasn’t deterred China. Rejecting the ruling, Beijing has persisted in seeking recognition of its claims, particularly from Southeast Asian nations. For years, Indonesia’s diplomats have challenged Beijing, but now the Prabowo-Xi joint statement has sparked fears that this may change.

It said the two nations had ‘reached important common understanding on joint development in areas of overlapping claims.’ The key point is that Indonesia thereby acknowledged China’s claim, giving them some legitimacy. The statement further mentioned an agreement to ‘establish an Inter-governmental Joint Steering Committee to explore and advance relevant cooperation’, indicating mutual interest in jointly exploiting resources in the sea.

The Indonesian Ministry of Foreign Affairs later released a statement clarifying that Indonesia still did not recognise China’s nine-dash line. That won’t stop Beijing from using the joint statement as expressing Indonesia’s capitulation.

This has implications for Indonesia’s broader interests in the South China Sea disputes, including how Indonesia has framed itself as a non-claimant in the disputed waters.

As for Xinjiang, the joint statement affirmed it was an issue of ‘internal affairs of China’ and said that Indonesia ‘firmly supports China’s efforts to maintain development and stability in Xinjiang.’

While Indonesia has always recognised Beijing’s sovereignty over Xinjiang, the province has not previously been directly mentioned in a joint statement by the two countries. This contrasts with Jakarta’s solidarity with the Muslim world in opposing Israel’s war against Hamas in Gaza.

The joint statement seemed to present some new enthusiasm from Indonesia for China’s Global Security Initiative and Global Civilization Initiative, two of three major Chinese initiatives, the third being the Global Development Initiative, that present a Chinese vision of the international order. Indonesia has been willing to support the Global Development Initiative because of potential economic benefits. But it has been reluctant to endorse the other two initiatives due to their vagueness and a concern that doing so may undermine its non-aligned position in world affairs.

Overall, the joint statement reads as a turn towards China, particularly by diminishing the long-term efforts of Indonesian diplomats to preserve the sanctity of international maritime law. Not only does it harm Indonesia’s ability to counter to Chinese claims; it also affects the recently resolved maritime boundary dispute with Vietnam.

The shift is all the more demeaning for Indonesia because it closely followed a series of Chinese coast guard intrusions in late October, the same week Prabowo assumed the presidency.

It had always been apparent that the new Indonesian president, despite his strongman image and past criticism of his predecessor’s approach to the South China Sea, would deal with China cordially. Indonesia has security concerns about Chinese maritime claims, but Prabowo’s concessions was probably economically motivated. This motivation will continue to dominate, since Prabowo is aiming to achieve 8 percent annual economic growth. Indeed, the Beijing visit came with considerable pledges for economic cooperation on green energy and tech, amounting to US$10 billion.

But economic gain does not need to come at the cost of sovereignty. Past Indonesian administrations were able to get economic benefits from China and even the Soviet Union without sacrificing sovereignty.

The joint statement reflects poorly on Indonesia’s new non-career foreign minister, Sugiono. It was likely agreed upon without consulting senior foreign affairs officials. They have worked tirelessly to fight the proposition that China and Indonesia have overlapping claims in the South China Sea and to prevent Indonesia from embracing China’s vision of the international order and its narratives on Xinjiang. If they were consulted, then they were likely overruled.

These developments reflect the diminished role in foreign policymaking of the Ministry of Foreign Affairs under Prabowo’s leadership—a risk that we have identified in the past. Traditionally, the ministry has acted as a check on the ability of any single president to unilaterally direct Indonesia’s foreign policy away from its principle of non-alignment.

With the foreign minister now seemingly an extension of Prabowo, but the foreign affairs ministry likely to keep defending long-standing positions, the country’s foreign policy may start to look inconsistent.

Australia’s new relationship with India has push-pull poles—the pull of the Indian diaspora in Australia and the push that China applies to the Indo-Pacific.

The diaspora is the personal dimension that pulls India and Australia together. China is the geopolitical push that shapes the four-year old India-Australia comprehensive strategic relationship.

Between the push-pull poles stretches the great pool of shared prosperity in trade and investment, education, science and technology, and clean energy.

This push, pull and prosperity defined much in Canberra’s India talkfest in Parliament House last week: the back-to-back meetings of the Australia-India Foreign Ministers’ Framework Dialogue and the second Raisina Down Under dialogue, a multilateral conference that aims to address geostrategic challenges in the Indo-Pacific. Here was first track and second track dialogue running so close as to overlap.

At the press conference after the foreign ministers’ dialogue, Australia’s Penny Wong said it was the 19th time she’d met her Indian counterpart, Subrahmanyam Jaishankar. When they came together on the Raisina stage the next day, Wong counted meeting number 20. She observed that among the world’s foreign ministers, ‘Jai is the person with whom I have met most and that says something about our friendship, it says something about my regard for him, and the wisdom and insight he always brings to our discussions.’

Personal chemistry always helps diplomacy, but interests drive. Interests have driven Australia and India to converge in this renewed relationship, far removed from their distant and often negative dealings in the 20th century and the early years of this century.

Wong said her constant contact with Jaishankar reflected the importance of what is being created: ‘We share a region and we share a future. We see India as just so important in terms of securing the region we both want and the world we both want.’

Wong said the diaspora of 1 million Australians with Indian heritage is ‘the beating heart of the relationship’. Jaishankar agreed that the diaspora is a key to the India-Australia bond, just as it is in India’s dealings with the United States: ‘The model is the manner in which our US relationship transformed. I do think it’s a change that can be corelated with the growth of the diaspora in the US.’

Jaishankar said the rapport with Australia showed ‘a relationship whose potential was waiting to be realised’. Among the four Quad members (Australia, India, Japan and the United States), he said, the bilateral dynamic that has changed the most for India is with Australia. ‘The relationship is on a roll,’ Jaishankar said, and ‘the more we do, the more the possibilities open up.’

India’s upbeat language on Australia contrasted the discussion about what China’s push is doing to the region.

The sharpest account offered to the Raisina dialogue was from Andrew Shearer, director-general of Australia’s Office of National Intelligence. Shearer said Prime Minister Anthony Albanese refers to him as the ‘bad news guy’, and he delivered such news. Geostrategic competition, Shearer said, would drive a ‘generational, structural contest in the Indo-Pacific’. Rivalry over critical technologies would be the ‘centre of gravity’ or ‘commanding heights’. Looking at China, Russia, Iran and North Korea, Shearer offered a ‘very strong view that we have underestimated the strategic impact of this emerging axis’.

Jaishankar’s language on China was that of a minister looking to ‘find ways to discuss how to normalise the relationship’. Since the deadly clash between Indian and Chinese troops on the Himalayan border in 2020, he said, the relationship had been ‘cut back’ and ‘very profoundly affected.’

On 21 October, India announced an agreement with China on ‘disengagement and resolution’ of border issues. A few days later, China’s Xi Jinping and India’s Narendra Modi sealed the deal with a handshake on the sidelines of the BRICS summit in Russia, the first formal bilateral between the two leaders in five years.

In Canberra, Jaishankar observed that the deal with China is a ‘positive development’. The next challenge, he said, was de-escalation of forces, with more negotiation by foreign ministers and national security advisors. At the Raisina dialogue, Jaishankar put the border issue into its broadest context: ‘It’s really in a way quite a challenge, because you have the two most populous countries, both of whom are rising in a broadly parallel time frame.’

With an eye on Donald Trump resuming the presidency in January, the Canberra talks emphasised what Wong called ‘the great importance in the Quad’.

Jaishankar said India had seen steady progress in its relationship with the US over the last five presidencies, including the previous Trump presidency. The second version of the Quad had been under Trump in 2017, Jaishankar said, and that should help its prospects with the new administration. India is confident, and Jaishankar said that its ‘relationship with the United States will only grow’.

In dealing with the Indo-Pacific impacts of the first Trump presidency, Australia did much in tandem with Japan. Canberra will again work with Tokyo, but this time New Delhi will add a new dimension to the Trump wrangling and whispering.

China might want to think again about its use of tourism as a means of influencing Palau. The people of the little Western Pacific country believe they’d be better off without swarms of tourists from China on their islands, causing environmental damage and spending their money mostly with Chinese businesses.

Other ill-effects include upward pressure on prices and the locking up of land in China-linked real estate investments, Palauan officials and people involved in tourism said in interviews.

In a leaked letter this year, the president of the country of 18,000 people, Surangel Whipps Jr, told an unidentified US senator that China had offered to ‘fill every hotel room’ and build as many more as Palau wanted.

To Palauans, that sounds more like a threat than a promise. A senior official sums up the general assessment of tourism from China: ‘The negative impacts [are] more than the value of the tourism itself.’

China has already put Palau through a cycle of what it thought was economic inducement and punishment. Last decade, it ramped up tourism numbers to the country but then knocked them down again by revoking Palau’s status as an approved destination, punishing it for continued diplomatic recognition of Taiwan. Arrivals from China peaked at 90,000 in 2015 and slumped to 28,000 in 2019, before the Covid-19 pandemic crushed tourism globally.

Now tourism from China is rising again: 8000 visitors from the country arrived in the five months to May.

There is a sense in Palau that it is just the beginning of resurgence. Businesses and investors connected with China have begun refurbishing Chinese restaurants and hotels in anticipation of a new surge in visitors. In what looked like a deliberate reminder of China’s economic importance ahead of Palauan general elections on 5 November, direct flights from Hong Kong resumed just five weeks ago.

When Americans, Australians and people from most other countries travel to Palau, they stay in Palauan-owned hotels, eat at Palauan restaurants, hire Palauan tour guides and contribute to the Palauan economy.

When tourists from China come, ‘they have these charter flights coming in, where a Chinese company owns a hotel in Palau, owns a tour company in Palau, owns the airplane that’s bringing them into Palau, so all this money that is being made from these tours is not trickling down to the local economy,’ says a former Palauan tour guide who, like other people interviewed for this report, asked not to be named.

One of the interviewees adds, ‘Chinese tour companies bought out entire hotels,’ leading managers to cancel reservations for other tourists. That ‘destroyed the market overnight’ for tourism from elsewhere.

This person also says that when tourists began arriving last decade, Chinese companies began acquiring long leases on prime real estate. (Foreigners can’t buy land outright.)

The senior Palauan official says, ‘One of their methods is they’ll lease property for 99 years and they don’t do anything to it, so they’re basically stalling development for Palau. That’s one of their tactics’ to gain economic and political influence. The result is diminished opportunity for locals to build businesses on suitable land.

Palauans have seen tourism drive inflation and expect that a renewed surge in arrivals from China will do the same again. ‘This kind of mass tourism will tend to push up the price of mass produce and local resources…,’ says the senior official. The price of giant coconut crabs, for example, was US$7 per pound before last decade’s tourism surge, the official says. Now it is US$60 per pound.

While tourists from any country will always include some who care little for protecting the natural environment, Palauans have found that the problem is unusually serious with groups from China.

The former tour guide recalls damage that tourists from China caused to one beautiful attraction, Jellyfish Lake. Some stole protected jellyfish from the lake to eat in their hotel rooms, using drawers as cutting boards. Hotels were forced to replace furniture and remove utensils that could be used for cooking.

Palauans often hear of tourists from China stealing animals from native habitats and bribing guides to look the other way. One interviewee describes instances of people from China taking giant clams for consumption directly from a reef. Another says tourists paid fishermen to bring them turtles, clams, shark fins and even dugongs, all of which are protected.

Then there’s infrastructure and business disruption. During the initial surge ‘they [came] in such big numbers, it overwhelms our sewer systems,’ the former tour guide said. ‘It overwhelms our stores. It overwhelms our tour services.’

Palau’s government has been trying hard to diversify tourism sources. Two weeks ago, Palau signed a deal with Japan for direct flights from Tokyo in 2025. Three days later, Australian airline Qantas agreed to take over direct flights from Brisbane from Air Nauru, aiming to increase frequency.

Palau’s people will welcome that.

Beijing has presumably imagined they would instead welcome another wave of tourism from China. But the behaviour of many of its tourists, the disruption caused by their arrival surges, and the cornering of their spending by operators and hotels connected to China—all these have only helped to galvanise Palauans against Beijing.

China’s Belt and Road Initiative (BRI) for investment abroad has been revamped with a greater focus on risk management and governance, and it is on the cusp of winning important new members.

Brazil is expected to announce it will join the program when China’s President Xi Jinping makes a state visit to the country following a G20 summit in Rio de Janeiro in late November. Colombian officials, meanwhile, have confirmed their government’s intent to join.

US Trade Representative Katherine Tai warned last week that Brazil should be ‘objective’ about the risks of joining and consider how best to protect its economic resilience.  But Brazilian President Luiz Inacio Lula da Silva has declared his interest in the scheme, as have several ministers.

Once Brazil and Colombia join, the only significant emerging nations outside the BRI will be Mexico, which would face a conflict with its trade agreement with the United States and Canada, and India, which has a difficult relationship with China and objects to the BRI project for a Pakistani economic corridor passing through contested territory in Kashmir.

The scheme’s membership of approximately 150 nations also includes several developed economies, including South Korea, Singapore, Saudi Arabia and 17 of the European Union’s 27 members. (G7 member Italy withdrew last December.)

China’s lending to developing countries now exceeds US$1.3 trillion (A$2 trillion). This makes it a larger official creditor to the developing world than the World Bank, the International Monetary Fund or the combined advanced nations, according to AidData, a research institute attached to the William & Mary university in the United States, which has the most comprehensive database of Chinese lending.

AidData says the scheme has significantly tightened its financial risk management and its environmental, society and governance (ESG) performance after its first five years of lending left at least 57 nations overdue on repayments or at risk of default.  There was also community and political backlash in many countries following poorly conceived and executed projects.

New lending reached a peak of US$142 billion in 2016 but had dived to US$74 billion by 2020. There was a small increase to US$79 billion in 2021.

The scheme has cut lending to the highest-risk countries and increasingly supports private rather than public projects. It is participating in syndicated loans with private lenders to spread risk and has begun lending to multilateral institutions, such as the African Export-Import Bank and the Africa Finance Corporation.  BRI loans now need to be backed with collateral, and they carry penalty interest rates for late payments. Most deals now have legally enforceable ESG safeguards.

Motivated by the number of borrowers in financial difficulty, China has been providing emergency balance-of-payments lending, most of which is denominated in yuan rather than US dollars.

‘It is learning from its mistakes and becoming an increasingly adept international crisis manager,’ AidData researchers commented, arguing that Western critics had failed to understand the extent to which the BRI had been reworked, and risked devising policies to compete with a version of the BRI that no longer existed.

The West was slow to respond to the BRI.  It was only in 2021 that US President Joe Biden announced a program, initially branded as Build Back Better World but then renamed the Partnership for Global Infrastructure and Investment (PGII), to combine G7 lending to developing countries.

The US contribution over a five-year period was to be US$200 billion, with a further US$400 billion to come from the other G7 members and the private sector. ‘We’re showing democracies can deliver,’ Biden said.

The PGII has a number of major projects, led by a transcontinental rail link from Angola’s Lobito port to the Katanga province in the Democratic Republic of Congo and the Copperbelt in Zambia on the east of the continent.  A less advanced plan would develop a Trans-Caspian transport corridor linking central Asian nations with Europe, while plans for an India–Middle East–Europe Economic Corridor were announced in late 2023.

China was lending up to three times as much as the United States until recently, but the margin has narrowed. US loans to the developing world reached US$60 billion last year, compared with just under US$80 billion from China.

However, China still appears to be winning the hearts and minds of the governments, if not necessarily the people, of the emerging world.  According to an AidData study, governments of developing countries aligned their voting in the United Nations General Assembly with China 75 percent of the time and with the United States just 23 percent between 2000 and 2023.  A government that increases its UN voting alignment with China by 10 percentage points can expect to see a near-tripling of aid and credit flows.