Tag Archive for: China

A loss in Europe is a loss in the Indo-Pacific

The United States shocked the world last week with President Donald Trump’s very public rift with Ukrainian President Volodymyr Zelenskyy. This was followed by a US pause on military aid and some intelligence sharing with Ukraine, all intended to push Ukraine to agree to a ceasefire on terms favourable to Russia. But Russia’s interests are also China’s. A bad peace in Europe may mean more bad behaviour in the Indo-Pacific.

Trump campaigned for the presidency in part on a commitment to end Russia’s war on Ukraine, without regard for who is the aggressor and who is the victim. He seems to want a legacy as the president who ended wars, contrasting with his predecessors, both Republican and Democrat. The overall direction of US foreign policy is now being shaped to fit within these constraints.

This has empowered voices within the Republican Party who see China, not Russia, as the pacing threat of our time. Key figures in the administration, such as nominee for Undersecretary of Defense for Policy Elbridge Colby, have for several years pushed the idea that to meet the threat posed by China, the US must direct resources away from Europe and the Middle East and towards the Indo-Pacific. That position has been widely, though not universally, adopted within the Republican Party.

There is certainly bipartisan agreement in the US that East Asia is now the key theatre for US grand strategy, and that China’s global ambitions and growing military prowess pose a pacing threat to the US and its democratic allies and partners.

In his Senate confirmation hearing this week, Colby said the US must focus on ‘denying China regional hegemony’ and that it ‘would be a disaster for American interests’ if Taiwan were to fall to China. But US aid to Ukraine and Israel has delayed arms shipments to Taiwan, and Colby has said the US simply doesn’t have the capacity to support conflicts in three regions. By his logic, and perhaps now that of the White House, the US must remove its support for Ukraine so it can concentrate its resources against China and in support of Taiwan.

But the reality is that the European and Indo-Pacific fronts are intricately linked as long as Russia and China support each other and their interests are aligned. Countering one adversary will require addressing the influence of the other.

The two countries declared a no-limits partnership just days before Russia invaded Ukraine in February 2022. Chinese President Xi Jinping reaffirmed that partnership last month on the three-year anniversary of the war. The partnership has been material and substantial: China has provided assistance to Russia’s war machine, geospatial intelligence for its military, markets for its natural resources and sanctioned companies, and backing at the United Nations.

Russia, meanwhile, is strengthening military cooperation with China, including in the Indo-Pacific. In 2024, the US intercepted Chinese and Russian bombers flying for the first time together near Alaska, and Russia joined China in military exercises in the Sea of Japan.

Both countries echo each other’s propaganda, and their massive media and covert disinformation apparatuses amplify each other’s messaging.

Why would China dedicate its resources and risk its reputation in Europe to support Russia in Ukraine if leaders in Beijing did not believe that a Russian win in Ukraine was vital to Chinese interests? Indeed, a Russian victory would be an immense victory for China as well. It would shatter the image of a strong and unified west, show NATO to be a paper tiger and sow doubt throughout the world about the value of US security guarantees. These are all goals that Beijing has pursued for decades, and that are key to the revisionist world order Beijing hopes to craft.

A Russian win in Ukraine, moreover, would create a clear precedent for one of Xi’s most important goals—taking Taiwan. That’s why the Taiwanese government, which has more to lose than anyone else in the Indo-Pacific region, has for three years loudly cheered US support for Ukraine. If Colby’s argument were correct—that is, if US military support for Ukraine ran counter to Taiwan’s interests—Taiwan would now be rejoicing. Instead, Taipei is filled with trepidation.

If the war in Ukraine ends on terms favourable to Russia, both China and Russia will be free to concentrate more of their joint efforts in the Indo-Pacific. Instead of a cautious China and a distracted Russia in the eastern theatre, the US will have to deal with an emboldened China and a vindicated Russia—even as US allies and partners in the region view the US with newfound skepticism. If the US at some point calls on Europe for assistance in East Asia, few would expect them to heed that call.

Defence, not more assertive cyber activity, is the right response to Salt Typhoon

The ongoing Salt Typhoon cyberattack, affecting some of the United States’ largest telecoms companies, has galvanised a trend toward more assertive US engagement in the cyber domain.

This is the wrong lesson to take.

Instead, the US should prioritise investments in cyber defence and reconsider its commitment to persistent engagement, a strategic move away from earlier US approaches based on restraint and deterrence. The attack underscores the risks of an increasingly permissive cyber environment: one in which large-scale cyber operations are normalised, restraint is eroded and investments in cyber defence are insufficient.

In November 2024, reports began spreading that the Salt Typhoon group had penetrated several major US telecommunications networks. These operations compromised sensitive data, including call metadata of US citizens and communications vital to national security agencies. The US government says the Chinese government is behind the attack.

What makes it so concerning is that it exploited long-standing vulnerabilities in obsolete and unpatched network infrastructures. Telecommunications companies, including Verizon, AT&T and T-Mobile, failed to secure network devices, with some systems still operating without multi-factor authentication. Active for more than a year before its detection, the breach highlights the need for additional investments in cyber defence, while also demonstrating the potential consequences of underestimating evolving digital espionage.

While public analyses of the incident are correct in pointing out its significance, they risk missing broader context. The attack is part of a pattern of cyber operations between the US and China.

The US has adopted a cyber persistence strategy, increasing the scale and frequency of operations against adversaries. National Security Agency and Cyber Command activities have expanded, with the US aiming to demonstrate its ability to persistently counter Chinese cyber campaigns while continuing its own efforts to compromise similar systems in China and other countries. The theory underlying this approach is that over time, US adversaries will learn norms of appropriate behaviour in the cyber domain as a result of the US imposing costs through its extensive cyber capabilities. This approach, however, can have unintended risks.

Specifically, it may help to create a permissive environment, where large-scale cyber intrusions are not only expected, but accepted as part of international competition. As the US intensifies its cyber responses, the boundaries of acceptable state behaviour in cyberspace erode, making it harder to establish norms that could minimise future conflicts. China and other countries could view these persistent operations as a justification for their own cyber campaigns, entrenching norms that explicitly authorise large-scale cyber operations.

This does not mean that greater US restraint would fundamentally change China’s or other adversaries’ cyber behaviour, at least in the short term. It is unlikely that most active states in the cyber domain could be quickly induced to curtail operations.

Rather, the continued expansion of US offensive cyber operations, whether in response to the Salt Typhoon attack or more generally, will probably provide opposite lessons to what the proponents of the policy intend.

Cyber operations are unlikely to lead to military escalation. But it does not follow that increased offensive cyber operations will lead to the diffusion of norms of restraint. Rather than sparking tit-for-tat escalation dynamics, the danger is that adversaries and third-party states may conclude that these sorts of attacks are fair on the international stage. This would make the cyber domain a more dangerous place even without escalation to full military conflict. Even if this particular horse is already halfway out of the barn, states should resist the urge to chase it over the horizon.

As the cyber domain becomes increasingly permissive, states are continuing to underinvest in cyber defence. This leaves critical infrastructure vulnerable to prolonged breaches like Salt Typhoon and heightens the probability of those breaches occurring. Despite the US having one of the most advanced cybersecurity systems in the world, the attack remained undetected for more than a year. This prolonged response time underscores a failure: a reactive, rather than preventative, approach to cybersecurity.

The US and its allies should prioritise cyber defence. This would certainly involve technical research and development, which should be supported by increased public research spending. But it would also go beyond that. To respond to the Salt Typhoon attack, the US should develop legal and policy frameworks to channel public and private investment toward cyber defence.

Stricter regulations and cybersecurity standards for telecom providers are also essential, as voluntary measures are failing to counter persistent threats. Revisiting broad liability shields for software firms, at least in some critical infrastructure sectors, could help to ensure better overall levels of security by providing incentives to bring more secure software to market and maintain its security over time. Additionally, states should continue enhancing global cooperation on cyber threat intelligence-sharing and collective defence initiatives.

The Salt Typhoon attack reminds us of vulnerabilities inherent in global telecommunications and cybersecurity frameworks. As state-sponsored cyber activities increase, states should resist the urge to respond by normalising and legitimising large-scale cyber operations. They should instead prioritise defence mechanisms, resilience and the establishment of norms that discourage offensive operations.

When dealing with China, Australia must prioritise security over economics

China’s economic importance cannot be allowed to supersede all other Australian interests.

For the past couple of decades, trade has dominated Australia’s relations with China. This cannot continue. Australia needs to prioritise its security interests when dealing with Beijing, and it shouldn’t overestimate or overstate its vulnerability to China’s coercive trade practices.

Prioritising security is particularly important as we confront escalating global competition and China’s increasingly assertive behaviour. China’s live-fire exercises in the Tasman Sea have once again brought attention to the growing threat of aggressive Chinese military actions in the Indo-Pacific.

The exercises were conducted in international waters and violated no international law. But the behaviour broke norms and was less than ideal: usually, such exercises are preceded by adequate early warning to affected countries. In this case, neither Australia nor New Zealand was informed, and early reports suggest that passenger aircraft that were already enroute were forced to reroute because of the exercises. This is unacceptable international behaviour, and the Australian government should not be shy in saying so.

Australia has been more than accommodating of China. In response to press questions on live-fire exercises, Prime Minister Anthony Albanese said China ‘could have given notice but Australia has a presence from time to time in the South China Sea’. This framing was unwise, to say the least. Albanese no doubt wishes to avoid escalation, but it is unnecessary to provide such false equivalence, which Beijing could exploit. The comment offers China a free pass.

Economic issues are important for political leaders, especially in democracies, where everyday issues take precedence even over discussions about national security. This is probably why Albanese highlighted the government’s success in boosting trade and addressing disputes with Beijing—even though many of these disputes were of China’s doing, rather than Australia’s.

But Australian leaders should also recognise that China is not simply doing us a favour by trading with us. It benefits from the goods and services that Australia offers and the revenue from what it sells. This is a mutually beneficial relationship, and disruptions will affect China too.

While China may be able to source its mineral and other resources from other parts of the world, Australia can similarly find other markets for its resources, as it has in response to previous Chinese trade obstruction. China buys from Australia for a variety of reasons, including price, quality and the predictability of supply. These are not values it can get from anywhere. In many countries, resources are in conflict zones that are difficult to access.

Any trade disruption would likely hurt Australia more than it would hurt China, but it would still damage China’s economy. There is a reason why previous trade punishments have targeted a few niche products, such as wine. China has not targeted critical items, such as mineral resources, precisely because it knows that its own economy would face difficulties if it did so. As China’s economy slows, the cost of transitioning away from Australian goods and services rises.

China has repeatedly used trade sanctions against smaller economies—such as Norway, Canada, Sweden and Mongolia—for perceived slights and other political reasons. But it has never really benefited from doing so, instead gaining a reputation as a bad and unreliable actor. Its trade threats in the past few years have been more bark than bite, with most targeted countries, including Australia, standing their ground and China eventually backing off.

While Australia should not pursue trade confrontation, it may be similarly unwise to emphasise or exaggerate its vulnerability, as this will only invite pressure. Rather, Australia should initiate talks with its European and Indo-Pacific partners, as well as the US, to present a united front against such threats.

China can make threats and apply sanctions only against countries with smaller economies, and only because it thinks they will have to face such sanctions alone. Even if sanctions are ineffective—as indeed they have been—we cannot let China assume that it can get away with such behaviour without consequences. A united response to China’s trade bullying is needed to deter and, if deterrence fails, punish China for such aggressive actions.

Political leaders in democracies no doubt have a hard time balancing economic and security requirements in foreign policy. But they should avoid over-emphasising trade and economic factors—Beijing will assume these are pressure points when leaders talk as if they are. Australia must instead emphasise that it will not bend to such tactics.

In case we forgot, Typhoon attacks remind us of China’s cyber capability—and intent

Australians need to understand the cyber threat from China.

US President Donald Trump described the launch of Chinese artificial intelligence chatbot, DeepSeek, as a wake-up call for the US tech industry. The Australian government moved quickly to ban DeepSeek from government devices.

This came just weeks after the Biden administration stunningly admitted on its way out of office that Chinese Communist Party hackers were targeting not just political and military systems but also civilian networks such as water and health. The hackers could shut down US ports, power grids and other critical infrastructure.

These incidents remind us that China has the intent, and increasingly the capability, to seriously challenge US and Western technology advantage. Australia will be an obvious target if regional tensions continue to rise. It must be well-prepared.

As ASPI’s Critical Technology Tracker highlights, China’s advances in critical technologies have been foreseeable for some time. US and Western confidence is manifesting as complacency.

DeepSeek has emerged as a cheap, open-source AI rival to the seemingly indomitable US models. It could enable Chinese technology to become enmeshed in global systems, perhaps even in critical infrastructure.

Meanwhile, Chinese hackers have stealthily embedded themselves in US critical infrastructure, potentially enabling sabotage, or the coercive threat of sabotage, to extract something Beijing wants. The two main perpetrators of these operations are Salt Typhoon and Volt Typhoon. The Chinese government backs both.

Salt Typhoon’s infiltration of at least nine US telecom networks has enabled CCP-sponsored hackers to geolocate individuals and record phone calls, directly threatening personal privacy and national security. This devastating counterintelligence failure includes the identification of individuals that US agencies suspect are agents working for China. It also enables CCP surveillance and coercion of US nationals and Chinese dissidents.

If anything, Volt Typhoon poses a greater threat, with covert access to critical infrastructure networks. Each reinforces the dangers of the other.

Some US officials involved in the investigation have said the hack is so severe, and the networks so compromised, that the United States may never be sure the intruders have been fully rooted out.

Both operations demonstrate sophisticated stealth. In particular, Volt Typhoon’s technique of living off the land—in which they sit at length in the systems, using its own resources—made detection harder. It could gain outwardly legitimate access without the requirement for malware. This reveals an intent to map and maintain access to critical systems, not for immediate destruction, but for whenever best serves Beijing’s interests. In this sense, it can be seen as a precursor to war.

The focus on critical infrastructure underscores how malicious cyber operations can undermine national resilience during peacetime and crises and sow doubt on a government’s ability to safeguard the people. Through these operations, adversaries could influence a target country’s decisions as leaders avoid taking any action that might provoke a disruption or sabotage.

Australia’s intelligence agencies are aware of these risks. Australia’s director-general of security, Mike Burgess, warned in his 2024 annual threat assessment that ‘the most immediate, low cost and potentially high-impact vector for sabotage [by foreign adversaries] is cyber’. This was reinforced in his 2025 assessment when he declared that ‘foreign regimes are expected to become more determined to, and more capable of, pre-positioning cyber access vectors they can exploit in the future.’ He warned that we’re getting closer to the threshold for ‘high-impact sabotage’.

The Australian Signals Directorate has been improving preparedness and resilience. It has helped Australian organisations to defend themselves and mitigate prepositioning and living-off-the-land techniques. ASD has also been building offensive capabilities needed to impose costs on attackers.

We must avoid the traps China sets as it seeks global information dominance. First, we can’t be complacent. It’s unsafe to assume that the US and its allies will remain decisively better than China, and that we can counter whatever Beijing can do. Second, we must reject the viewpoint that ‘everyone spies so it would be hypocritical to condemn China’, as it is a false moral equivalence. Third, we must avoid arguing that there isn’t present threat just because Beijing doesn’t have the intent to go to war today. This wishful thinking is a dangerous mistake. If we fall into these traps, we present Beijing with more time and render ourselves incapable of advancing our interests.

Chinese capabilities are strong and growing, and the way they are being used by the CCP demonstrates clear malign intent. This should be pushing elected governments to take the protective action and prepare for future cyber operations.

The reluctance to see the threats in the information domain as equal to traditional threats is a decades-old mistake that must be corrected. We need to minimise our dependence on China for technology.

China’s naval deployment should invigorate Australia’s election debate

The Australian government’s underreaction to China’s ongoing naval circumnavigation of Australia is a bigger problem than any perceived overreaction in public commentary. Some politicisation of the issue before a general election is natural in a democracy—and welcome if it means Canberra’s defence and China policy settings feature more prominently in debates ahead of the election due by May.

How times have changed. Fifteen years ago, Australia was worried that the quadrilateral partnership with India, Japan and the US would spook China, making it worry that it was being strategically encircled by the US and its regional allies and partners. Wind the clock forward to 2025 and China’s navy is off Perth, circumnavigating Australia with a potent surface action group.

This is the furthest south that a Chinese naval flotilla has ventured. This one is composed of a cruiser, a frigate and a replenishment ship—above the surface, at least.

Naval analysts have urged Australia to temper its reaction to the deployment because Canberra has a reciprocal interest in freedom of navigation in China’s maritime periphery. This is certainly a factor, and to some extent puts the government in a bind. The Chinese navy has a clear legal right to operate in waters close to Australia, even if it is going very far out of its way to make a point. That includes the right to conduct live-fire exercises.

But what point is Beijing making? Even while noting legal reciprocity in freedom of navigation, ordinary Australians are quite entitled to read hostility in China’s intentions. The flotilla was not invited here, and China didn’t notify us it was coming. Carrying out live fire exercises in the Tasman Sea with little or no notice, as the flotilla did on 21 February, wasn’t just unprofessional; it sent an unmistakably coercive signal to Australia and New Zealand.

By sending its navy all the way around Australia, the Chinese Communist Party is signalling that all of Australia lies within reach and is part of its area of direct military interest. It is showing it can project combat power and potentially hold Australia’s maritime communications at risk even though it lacks a base close to the continent. (And we should not think that Beijing has given up on getting one.)

The initial response from Australia’s government was muted and, on the issue of whether China had given warning of its live fire drills, muddled. This, and Prime Minister Anthony Albanese’s evident desire to downplay the significance of the deployment will have been noted by Beijing, which with the deployment is testing and comparing reactions in Canberra, Wellington and Washington.

The United States, under new political management, has so far stayed silent on the deployment, despite the concurrent presence in Australia of the chief of its Indo-Pacific Command and a US nuclear submarine at HMAS Stirling, near Perth. There is still time for the US to show its support this week, before the task group completes its tour of Australia and returns to the South China Sea through the Indonesian archipelago, as it can be expected to do.

New Zealand’s initial response was conspicuously better than Australia’s. Defence Minister Judith Collins linked China’s motivations to its strategic quest for greater influence and access to marine resources in the South Pacific, uncomfortably underscored by a recent deal between Beijing and the Cook Islands that blindsided Wellington.

A firmer Australian government reaction could have set the tone for a less divisive political debate. Canberra’s contention that it has stabilised bilateral relations with China looks increasingly questionable in light of the unsubtle ‘or else’ message trailing in the Chinese navy’s wake as it sails around Australia. China’s coercion of Canberra since 2020 has never stopped; it has simply taken different forms.

Australians and New Zealanders should not fall into the trap of viewing China’s naval deployment to their neighbourhood in isolation and adopting a defensive mindset. In fact, the Chinese military is mounting concurrent drills at several locations, including near Japan, Taiwan and the Gulf of Tonkin, close to Vietnam. Beijing is ramping up its military presence across the Western Pacific to calibrate regional reactions, most likely with an interest in probing the strength of US alliances and security partnerships early on in the second Trump administration.

The more Australia and other countries speak with one voice on China, the harder it will be for Beijing to exploit potential wedges.

This will not be the last time a Chinese surface action group undertakes a three-ocean deployment around Australia. But the current deployment may turn political debate to defence spending increases, the hollowed-out state of the Royal Australian Navy’s surface capabilities and the government’s supposed stabilisation policy settings. If it does, we may owe a debt of gratitude to the Chinese navy.

China is on course for a prolonged recession

The risk of China spiralling into an unprecedentedly prolonged recession is increasing.

Its economy is experiencing deflation, with the price level falling for a second consecutive year in 2024, according to recent data from the National Bureau of Statistics of China. It’s on track for the longest period of economy-wide price declines since the 1960s.

Coupled with the collapse of the property sector, a looming trade war with the United States and demographic and debt overhang challenges, much of the Chinese public has lost confidence in the economy and its leadership.

The country has the ingredients for a recession, and not a short one. It has spent too much on investment and needs to turn to consumption as a source of demand, but people are unwilling to spend. They have long had high savings rates, and now deflation is further discouraging spending. So do falling property values, ageing of the population and excessive corporate and government debt.

Getting out of such a recession will be hard, because of the challenge of restoring confidence and getting households and businesses to spend more. Since local government debt is high, expanding public expenditure to stoke demand would worsen economic imbalances.

Current deflation is a result of the Chinese government’s long-standing adherence to the China model, which consists of extensive state control and ownership of resources, limited free-market activity, and authoritarian CCP leadership. The model fuelled both the country’s economic miracle and its most intractable problem: a structural imbalance between investment and domestic consumption.

To sustain fast growth and cushion economic downturns, China has long relied mainly on investment in infrastructure, property and manufacturing. Household consumption is seriously constrained through unfair policies and a discriminatory social security system. These include strictly limited rights to move for work, weak human rights protections and relatively low benefits for migrant workers.

In the 30 years to 2012, investment gradually rose from 32 percent to 46 percent of GDP, while the share of final consumption declined from 66.6 percent to 51.1 percent. The high rate of investment financed necessary infrastructure upgrades and modernised China’s production technology, helping the country become a global manufacturing powerhouse. However, over time, high rates of investment led to severe overcapacity in key industrial sectors, particularly after the 2008 financial crisis.

Under Xi Jinping’s leadership since 2012, the government has persisted with an export-oriented policy. In 2023, investment accounted for 41.1 percent of nominal GDP (versus a global average of 24 percent), with consumption representing 56 percent (versus a global average of 76 percent). China’s trade surplus in 2024 reached a record US$992 billion. This may displease Donald Trump who may choose to implement trade barriers that could further destabilise the Chinese economy.

Xi has failed to progressively institute a welfare state to create the confidence needed for boosting household consumption. He believes welfarism encourages laziness. So, amid ongoing economic and political uncertainty, families have long prioritised cutting expenses and increasing savings, which has further depressed domestic consumption.

In the second quarter of 2024, the central bank’s income confidence index registered 45.6 percent, down 4.4 percentage points from the first quarter of 2022, when the government imposed strict controls against Covid-19. China’s household savings rate surged to 55 percent in 2024, up 11.2 percentage points from 2023 and the highest level since 1952.

Xi has made it clear that he intends to stay the course, and is doubling down on state economic control. China has shifted away from market liberalisation, reverting to state-led development and industrial policy. The private sector has lost out. The share of private enterprises among China’s largest listed companies declined sharply over three years, from 55 percent in mid-2021 to 33 percent in mid-2024. China’s foreign direct investment dropped 27.1 percent in 2024, following an 8.0 percent decline in 2023.

The rapid ageing of China’s population will make it difficult to boost domestic consumption and rein in ballooning debt over the next decade.  The pension system is at risk of running dry by 2035, further exacerbating structural imbalances that policymakers have vowed to address.

With never-ending anti-corruption and ‘strictly governing the Party’ campaigns, Xi has taken China back to a personal dictatorship after decades of institutionalised collective leadership. Under the centralised one-man rule, any efforts by local governments and officials to break the rigid political system risk severe punishment.

More and more laws and regulations have been enacted to surveil the population, driving up social costs. Reformers and advocates of greater freedom of thought and expression have been silenced under Xi’s crackdown on human rights. The political reforms in the Deng Xiaoping, Jiang Zemin and Hu Jintao eras, which unleashed economic dynamism and spurred innovation, have come to a halt or even regressed.

The government’s stimulus measures have failed to boost economic recovery. Since July 2024, the youth unemployment rate has remained above 17 percent.

The economy might not yet be in recession—meaning contraction in GDP—but it is now growing very slowly by its standards of the past four decades. The government estimates GDP was 5.0 percent higher last year than in 2023, but researchers at Rhodium Group estimate growth was in fact only 2.4 to 2.8 percent.

With Chinese warships nearby, Australia needs to step up as a maritime power

China now fields the world’s largest navy, and last week’s rare foray into our exclusive economic zone should be a wake-up call for Australians. Our most critical economic and security interests travel by sea, and in a rapidly deteriorating strategic environment, we can’t afford complacency. It’s time for Australia to step up as a genuine maritime power.

Over the last decade, China has morphed from a modest coastal navy into a true blue-water force. In 2015, its navy’s battle force—submarines, surface combatants and aircraft carriers—stood at 255 vessels, according to the US Congressional Research Office. That figure has soared to 400 in 2025, with further growth on the horizon. The fleet’s quality has also jumped, with around 70 per cent of China’s current battle force built since 2010.

The Royal Australian Navy fields just 16 battle-force vessels—its smallest and oldest in decades. That includes six submarines aged 22 to 29 years, seven Anzac-class frigates (19 years to 27 years old), and three much newer Hobart-class destroyers that lack the firepower of true destroyers. While the government plans to grow the fleet by the 2030s and 2040s to levels not seen in decades, the current shortfall is compounded by dwindling support capabilities—such as replenishment, hydrography and mine warfare—after decades of underinvestment by successive governments.

Comparing ship counts alone may be crude, but it highlights China’s drive to become a true blue-water maritime power. Its rapid fleet expansion goes hand in hand with sweeping structural reforms, including the creation of a coast guard in 2013—now the world’s largest maritime law enforcement outfit, boasting more than 142 vessels.

Among them is the so-called monster ship 5901 Nansha—nearly four times the size of an Anzac-class frigate, which form the backbone of our surface combatant fleet.

The growth and modernisation of China’s navy has gone hand-in-hand with an increasingly expeditionary strategy. Chinese naval deployments to the Indian and Pacific oceans are on the rise, marked by the establishment of a naval base in Djibouti in 2017 and increasingly common Pacific port visits, including stops in Vanuatu and Papua New Guinea as well as hospital ship deployments to the South Pacific. Against this backdrop, Australia shouldn’t be shocked to see a Chinese navy task group off our east coast.

It’s rightly considered an uncommon occurrence, particularly since Australia’s east coast isn’t exactly on the way to anywhere—making it clear this was a deliberate show of capability. But we should expect it to become increasingly common.

Why should Australia care about China’s growing naval and maritime power? Because our core vulnerabilities lie at sea. Some 99 per cent of our trade travels by ship, and 99 per cent of our data travelling to the rest of the world passes through undersea cables. But it’s not just about data and trade generally; it’s particularly the critical goods that keep our economy running and ensure our security, from fuel and ammunition to pharmaceuticals and fertiliser. Cut off those supplies, and we cripple our economy and security: no fuel means grounded F-35s and idle trucks nationwide.

In a crisis or conflict, an adversary wouldn’t need to invade our shores to bring Australia’s economy—and by extension, our defence—to its knees. All it would have to do would be to cut off our critical seaborne supplies: fuel, fertiliser, ammunition, pharmaceuticals, and more. In a rapidly deteriorating strategic environment, Australia must be able to defend its maritime domain.

Recognising this vulnerability means Australia must develop the capacity to protect critical seaborne supplies in a crisis. It demands focus, structural reform, speed and investment. The 2021 announcement of AUKUS (our nuclear-powered submarine pathway), the planned surface combatant fleet expansion and the army’s move to adopt maritime strike are all crucial steps, but they aren’t enough. We must address the wider gaps in the fleet, and do it at speed.

We must recognise that maritime capability isn’t just hardware; it’s also structure and mindset. We need to reform our civil maritime security, establish a coastguard to free the Royal Australian Navy from border policing and adjust our legislative architecture to build a genuinely capable maritime strategic fleet.

Australia shouldn’t, and can’t, hope to match China’s naval might. Our maritime strategy hinges on alliances and partnerships across the region, including deeper co-operation with partners like the United States, Japan, and India. Yet to safeguard our vital interests at sea, we must demonstrate self-reliance within our alliances – we must develop a comprehensive maritime strategy and resource it.

China’s naval demonstration on Australia’s east coast should serve a reminder of our vulnerability, and a warning that addressing this vulnerability requires Australia to truly recognise its place as a maritime power. Our future prosperity and security depend on it.

China’s ships near Australia. Challenges in the South China Sea. Get used to it

Australia can take three lessons from Chinese military behaviour in the past two weeks.

China will keep conducting dangerous military manoeuvres against us and other countries in the South China Sea; its actions will continue to differ from its words; and it is likely to send advanced Chinese warships to our region more often and for longer.

It has been an eventful fortnight in the China-Australia military relationship. First, on 11 February the Department of Defence reported the fifth known incident of unsafe behavior by China’s military towards the Australian Defence Force. On the same day the department reported that a powerful Chinese naval task group was operating in Australia’s northeastern maritime approaches.

On 17 February, Defence reported that it had restarted senior military talks with China. Talks were held at the level of vice chief of defence and this marked the first time that senior-level dialogue had been held between militaries since 2019 (Previous talks had occurred at the level of chief of defence, and working level talks have been held twice since 2019.

Finally, on 21 February and the following two days, the Chinese task group conducted not one but two live-fire exercises in the Tasman Sea, between Australia’s most populous region and New Zealand. These unprecedented exercises, while consistent with international law, came with limited notice, meaning commercial aircraft had to quickly change flight paths to avoid potential danger. Foreign Minister Wong challenged her Chinese counterpart over the incident on the margins of a G20 meeting in South Africa.

Expect China’s military to keep targeting Australia, as well as other US allies and partners that uphold freedom of navigation and overflight in the South China Sea. In the coming month, ASPI will release a live tracker of military incidents to outline frightening trends of unsafe behavior by China’s military towards Australia, the US, Canada, the Netherlands, the Philippines and any other country that challenges Beijing’s excessive maritime claims.

Second, this fortnight reminds us of the vast gulf between China’s words and actions. China’s readout of the 17 February defence talks noted that both sides had ‘agreed to continue strengthening strategic communication … properly handle disputes and differences, and carry out exchanges and cooperation.’ Its South China Sea challenges are the cause of dispute, while its far seas deployments lack transparency and communication.

This lesson also reminds us that while China’s tactics may change, its strategy does not. We may have ups and downs in our diplomatic, economic and military relations with China, but long-term trends reflect a deteriorating relationship with a global power set on expanding its influence. The past fortnight has provided a snapshot of China’s ability to deploy a variety of tactics, which in this case were designed to signal its military reach and test Australia’s military and diplomatic responses.

The third lesson is that we should expect more Chinese naval deployments in and around Australia’s exclusive economic zone. This trend has been evident since 2022, but there are broader developments underway in China’s military that indicate Beijing’s ambition to develop a global navy that will be able to project power into our region more frequently and for longer periods at a time.

China’s naval strategy for most of the 20th century was focused on coastal defence. However, since 2008, it has deployed naval task groups to the Gulf of Aden for counter-piracy operations. These have typically been made up of two combatant ships and an oiler for logistical support. Each task group can stay in the gulf for about four months.

Due to a lack of support ships or a network of overseas support bases, we haven’t seen regular and sustained deployments by China’s navy to other areas of the globe. But this trend is changing.

In December 2024, the US Department of Defense reported that ‘China is expected to build additional fleet replenishment oilers soon to support its expanding long-duration combatant ship deployments.’ China has 12 replenishment oilers that support long-distance, long-duration deployments. (The US Navy operates 15 replenishment oilers and and can also use the allies’ ports ). Construction of new oilers has become a priority for China, especially given its lack of overseas logistics facilities.

China had initial success in establishing an overseas base at Djibouti, which now provides some logistical support to China’s naval deployments. China also maintains a regular military presence at the Ream naval base in Cambodia. However, despite efforts to persuade other countries, including Pacific Islands countries, China has yet to establish military bases or logistical facilities elsewhere.

As China’s navy improves its logistics and defensive capabilities, a lack of overseas bases will only slow, not stop, China’s ambition to project naval forces into global environs (including Australia’s) more often and for longer durations. This will have implications for Australia’s own limited naval capabilities, which will come under pressure to monitor more Chinese ships in our region, while continuing operations that support freedom of navigation and overflight in the South China Sea.

DeepSeek is in the driver’s seat. That’s a big security problem

Democratic states have a smart-car problem. For those that don’t act quickly and decisively, it’s about to become a severe national security headache.

Over the past few weeks, about 20 of China’s largest car manufacturers have rushed to sign new strategic partnerships with DeepSeek to integrate its AI technology into their vehicles. This poses immediate security, data and privacy challenges for governments.  While international relations would be easier if it weren’t the case, China’s suite of national security and intelligence laws makes it impossible for Chinese companies to truly protect the data they collect.

China is the world’s largest producer of cars, and is now making good quality, low-cost and tech-heavy vehicles at a pace no country can match. It has also bought European industry stalwarts, including Volvo, MG and Lotus. Through joint ventures, it builds and exports a range of US and European car models back into global markets.

DeepSeek has struck partnerships with many large companies, such as BYD, Great Wall Motor, Chery, SAIC (owner of MG and LDV) and Geely (owner of Volvo and Lotus). In addition, major US, European and Japanese brands, including General Motors, Volkswagen and Nissan, have signed on to integrate DeepSeek via their joint ventures.

Australia is one of the many international markets where Chinese cars have gained enormous traction. More than 210,000 new cars were sold into Australia in 2024, and Chinese brands are set to take almost 20 percent of the market in 2025, up from 1.7 percent in 2019. Part of this new success is due to the government’s financial incentives encouraging Australians to purchase electric vehicles. China now builds about 80 percent of all electric vehicles sold in Australia.

Then, there are global markets where Chinese car brands are not gaining the market share they have in Australia (or in Russia, the Middle East and South America), but where Chinese-made cars are. This is the case in the United States and in Europe, for example. This is because many foreign companies use their joint ventures in China to sell China-made, foreign-branded cars into global markets. Such companies include Volkswagen, Volvo, BMW, Lincoln, Polestar, Hyundai and Kia.

Through its Chinese joint venture, Volkswagen will reportedly partner with DeepSeek. General Motors has also said it will integrate DeepSeek into its next-generation vehicles, including Cadillacs and Buicks. It’s unclear how many such cars may end up in overseas markets this year; that will likely depend on each country’s regulations.

It is not surprising that DeepSeek is a sought-after partner, with companies scrambling to integrate and build off its technology. It also shouldn’t have been a shock to see this AI breakthrough coming out of China—and we should expect a lot more. Chinese companies, universities and scientific institutions made impressive gains over the past two decades across most critical technology areas. Other factors, such as industrial espionage, have also helped.

But widespread integration of Chinese AI systems into products and services carries serious data, privacy, governance, censorship, interference and espionage risks. These risks are unlikely ever to go away, and few government strategies will be able to keep up.

For some nations, especially developing countries, this global integration will be a bit of a non-event. It won’t be seen as a security issue that deserves urgent policy attention above other pressing climate, human security, development and economic challenges.

But for others, it will quickly become a problem—a severe one, given the speed at which this integration could unfold.

Knowing the risks, governments (federal and state), militaries, university groups and companies (such as industrial behemoth Toyota) have moved quickly to ban or limit the use of DeepSeek during work time and via work devices. Regulators, particularly across Europe, are launching official investigations. South Korea has gone further than most and taken it off local app stores after authorities reportedly discovered that DeepSeek was sending South Korean user data to Chinese company ByteDance, whose subsidiaries include including TikTok.

But outside of banning employee use of DeepSeek, the integration of Chinese AI systems and models into data-hungry smart cars has not received due public attention. This quick development will test many governments globally.

Smart cars are packed full of the latest technology and are built to integrate into our personal lives. As users move between work, family and social commitments, they travel with a combination of microphones, cameras, voice recognition technology, radars, GPS trackers and increasingly biometric devices—such as those for fingerprint scanning and facial recognition to track driver behaviour and approve vehicle access. It’s also safe to assume that multiple mobile phones and other smart devices, such as smart watches, are present, some connecting to the car daily.

Then there is the information aspect—a potential influx of new AI assistants who will not always provide drivers with accurate and reliable information. At times, they may censor the truth or provide Chinese Communist Party talking points on major political, economic, security and human rights issues. If such AI models remain unregulated and continue to gain popularity internationally, they will expose future generations to systems that lack information integrity. As China’s internal politics and strategic outlook evolve, the amount of censored and false information provided to users of these systems will likely increase, as it does domestically for Chinese citizens.

Chinese built and maintained AI assistants may soon sit at the heart of a growing number of vehicles driven by politicians, military officers, policymakers, intelligence officials, defence scientists and others who work on sensitive issues. Democratic governments need a realistic and actionable plan to deal with this.

It may be possible to ensure that government-issued devices never connect to Chinese AI systems (although slip-ups can happen when people are busy and rushing), but it’s hard to imagine how users could keep most of their personal data from interacting with such systems. Putting all security obligations on the individual will not be enough.

Australia has been here before. Australia banned ‘high-risk vendors’ in from its 5G telecommunications network in 2018, and the debates leading up to and surrounding that decision taught us how valuable it was for the business community to be given an early and clear decision—something some other countries struggled with. Geostrategic circumstances haven’t improved since Australia banned high-risk vendors from 5G; unfortunately, they’ve worsened.

Australia’s domestic policy settings are also driving consumers towards the very brands that will soon integrate DeepSeek’s technology, which politicians and policymakers have been told not to use. Politicians from all parties test-driving BYD and LDV vehicles highlights that parliamentarians may need greater access to more regular security briefings to ensure they are fully across the risks, with updates provided to them in a timely fashion as and when those risks evolve.

Tackling this latest challenge head-on is a first-order priority that can’t wait until after the 2025 federal election.

Governments must ensure this issue is given immediate attention from their security agencies. This needs to include an in-depth assessment of the risks, as well as a consideration of future challenges. Partners and allies should share their findings with each other. An example of the type of activity that should be incorporated into such an assessment is Australia’s experience in 2017 and 2018 leading up to its 5G decision, when the Australian Signals Directorate conducted technical evaluation and scenario-planning.

There is also a question of choice, or rather lack of it, that needs deeper reflection from governments when it comes to high-risk vendors. Democratic governments should not allow the commercial sector to offer only one product if that product originates from a high-risk vendor. Yet there are major internet providers in Australia which provide only Chinese TP-Link modems for some internet services, and businesses which only sell Hikvision or Dahua surveillance systems (both Chinese companies were added to the US Entity List in 2019 because of their association with human rights abuses and violations).

Not only do the digital rights of consumers have to be better protected; consumers must also be given genuine choices, including the right to not choose high-risk vendors. This is especially important in selecting vendors that will have access to personal data of citizens or connect to national critical infrastructure. Currently, across many countries, those rights are not being adequately protected.

As smart cars integrate AI systems, consumers deserve a choice on the origin of such systems, especially as censorship and information manipulation will be a feature of some products. Governments must also provide a commitment to their citizens that they are only greenlighting AI systems that have met a high standard of data protection, information integrity and privacy safeguards.

Which brings us back to DeepSeek and other AI models that will soon come out of China. If politicians, government officials, companies and universities around the world are being told they cannot use DeepSeek because such use is too high-risk, governments need to ensure they aren’t then forcing their citizens to take on those same risks, simply because they’ve given consumers no other choice.

Bookshelf: The conscience of the CCP, whose death triggered Tiananmen

Hu Yaobang is one of China’s unsung heroes.

Inside China, anyone who can remember the bloodshed in Tiananmen Square in June 1989 will also remember the well-respected Hu. But outside China, we tend to forget that the violently quelled demonstrations were triggered by his death just seven weeks earlier. The popular Hu served as the head of the Chinese Communist Party from 1980 until 1987, when supreme leader Deng Xiaoping removed him from office for his outspoken views.

For many years the CCP stifled discussion about Hu and downplayed his significance, and it was only in 2015, 100 years after his birth, that his image was officially rehabilitated. Biographies in Chinese are readily available, but an English-language biography is long overdue.

In The Conscience of the Party: Hu Yaobang, China’s communist reformer, Robert Suettinger reconstructs Hu’s life against the backdrop of China’s tumultuous recent history and the deep divide in the CCP between conservatives and reformists. A long-time scholar of Chinese politics, Suettinger has worked for the US State Department and the Central Intelligence Agency, and was director of Asian affairs at the National Security Council under president Bill Clinton.

Hu was born into a poor peasant family in Hunan province and left school at 14 to join the Communist Youth League and Mao Zedong’s revolution. Intellectually gifted and amicable, Hu rose rapidly through the ranks of the People’s Liberation Army and the CCP, spending much of his career handling organisational issues and propaganda. Fifteen years as head of the youth league made him particularly popular among young Chinese.

Early in his career, Hu was an ardent Maoist. But as the chairman’s mistakes piled up during the Great Leap Forward and the Cultural Revolution, Hu’s scepticism grew, as did his outspokenness. Mao purged and rehabilitated Hu twice along with several other critics. But between purges, Hu oversaw the rehabilitation of thousands of cadres, which gained him wide support.

Suettinger is at his best detailing the backroom politics within the CCP. To finalise the ouster of Mao’s chosen successor, Hua Guofeng, in 1980 Deng selected Hu to take over as the titular leader. Initially Hu was CCP chairman and, once that title was abolished, became party general secretary. However, there was never any doubt that real power lay with Deng, who needed Hu’s support to stave off his adversaries.

Suettinger also debunks the notion that Deng was Hu’s mentor. Hu and premier Zhao Ziyang both wanted China to cast off the shackles of Maoism and worked closely with Deng in the early 1980s. But differences soon emerged, particularly between Deng and Hu. Unlike Deng, who was focused on reforming the economy, Hu wanted broader political reform, particularly in the CCP.

Hu’s accommodating approach to student demonstrations in 1986 is often cited as the cause for his ouster. However, Suettinger makes a compelling case that Hu’s efforts to reform the party, abolish lifelong tenure for senior cadres and rejuvenate the party leadership were the real reasons. On several occasions Hu suggested that Deng, who was 82 at the time, should lead by example and retire. For Deng, this was a step too far.

The inner workings of the CCP can be brutal. Once Hu’s fate had been decided, he underwent a gruelling life meeting—a gathering where participants engage in self-criticism—to confess his errors and be criticised by a group of leading cadres. The six tortuous days left Hu broken and humiliated, and he tendered his resignation. He was allowed to retain his politburo seat but was otherwise sidelined and ignored.

Suettinger also shines a light on the origins of China’s economic reforms. The CCP’s central committee plenary in December 1978, when Deng launched the reform and opening of the economy and confirmed his position as the country’s leader, is generally heralded as the turning point. Less well known is the fact that Hu did much of the heavy lifting. He was rewarded with a promotion, but the CCP has subsequently played down his role.

Since coming to power in 2012, Xi Jinping has consolidated his grip on the CCP, stacked the leadership with acolytes and removed term-limits on his own tenure. However, tensions between conservatives and reformists are running high behind the scenes. With the economy in trouble, Xi will need to work hard to secure a fourth term at the 2027 party congress. Suettinger’s analysis of the power play within the CCP offers valuable pointers about how an eventual succession might pan out.

Suettinger spent a decade researching Hu’s life, digging into little-known Chinese archives, memoirs and websites. The result is an authoritative biography that at long last gives Hu the credit he deserves.