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Tag Archive for: China

Australia’s defence department calls time out on TikTok

The news that Chinese-owned video-sharing app TikTok is not approved for use on devices owned by Australia’s Department of Defence, as the ABC reported today, is hardly a surprise.

Defence’s default position on what apps it allows on its work phones is, in effect, that all apps are banned unless there’s a need for them and they pass a security test. Unsurprisingly, seeing how our defence personnel put their own spin on the ‘Haribo Challenge’ is not a top priority for the department.

The news follows a warning in mid-December from the Pentagon to various US military branches to remove the popular app from their phones. The Australian decision, as with the ban on the use of Chinese-owned app WeChat almost two years ago, is a no-brainer.

Like most social media apps—or any other app, for that matter—TikTok and WeChat require their users to agree to a startlingly invasive list of permissions. A recent analysis of TikTok’s privacy and data-collection policies revealed that it demands a worryingly high level of access to systems and information on both Android and Apple devices.

These include requiring full access to the device’s camera and microphone (hardly surprising for a video-sharing app) and its contact list, as well as detailed location data using GPS. The GPS tracking is ‘surprising’, say the researchers at security company Proofpoint who analysed the app, ‘especially as TikTok videos don’t obviously display location information’.

The metadata harvested from these apps can paint a vivid picture of what military personnel are up to, as the 2018 Strava app debacle uncovered by my ASPI colleague Nathan Ruser showed. The Strava case demonstrated, too, that an app doesn’t need to be owned by a foreign adversary for it to inadvertently pose a serious risk to military operational security.

But when the app is owned by a company operating in an authoritarian country, as TikTok’s owner ByteDance is, there are added risks to users, whether they’re military personnel or not. It’s those risks that prompted a full-scale pushback from US authorities as TikTok’s popularity rose in America.

The committee on foreign investment there has said the app could pose national security risks for Americans and possibly be used to influence or monitor them. In November, the New York Times reported that the US government ‘had evidence of the app sending data to China’. In a recent lawsuit in California, the plaintiff has alleged that TikTok transferred vast quantities of her private and personally identifiable data to servers in China.

TikTok has denied that its data is being sent back to Beijing, stating that all US user data is stored in the US, with backup redundancy in Singapore. But, as Proofpoint’s researchers pointed out, there’s no information on TikTok’s website about where data on users from other countries, including Australia, is stored.

Even if Australian users’ data is being stored in Singapore, ByteDance’s engineers, who are based in Beijing, would still need to access that data in order to continue to improve the app, as David Carroll, an associate professor of media design at Parsons School of Design, has argued.

Once it’s there in Beijing, it could be easily accessed by the authorities. After all, as is now well known (thanks in part to the Australian government’s decision to ban Huawei from taking part in the rollout of the national 5G mobile network), China’s National Intelligence Law from 2017 requires organisations and citizens to ‘support, assist and cooperate with the state intelligence work’.

The pushback against TikTok, which this Australian Defence ban has now played a small role in, has reportedly prompted internal discussions at ByteDance as to their best course of action. The options being canvassed at the moment, according to Bloomberg, range from an ‘aggressive legal defense and operational separation for TikTok’ to ‘sale of a majority stake’.

ByteDance, it seems, is determined to put as much daylight as possible between the company and Beijing. TikTok CEO Alex Zhu says he would turn down a request from President Xi Jinping himself to censor content on the app—an entirely meaningless claim, given that’s not even remotely how China’s censorship system works in practice.

A recent TikTok transparency report tested out another bit of sophistry. The report claimed there were zero takedown requests from China, but five from Australia. However, given that the version of TikTok that Australia has doesn’t work inside the Great Firewall of China, that’s hardly surprising at all.

Defence has clearly not been fooled by such obfuscations. That the company is now entirely captured by Beijing’s censorship and surveillance apparatus is beyond doubt. Only months ago, for example, Uyghurs in Xinjiang were using Douyin, the version of TikTok used within the Great Firewall, to shine a light on the brutal surveillance state. Now, chillingly, those videos of despair have been expunged and replaced with shiny happy people holding hands.

Editors’ picks for 2019: ‘Espionage or interference? The attack on Australia’s parliament and political parties’

Originally published 21 February 2019.

It doesn’t get much bigger than attacking the home of democracy—parliament house—and a country’s major political parties only months out from a federal election.

In his statement on these attacks, Prime Minister Scott Morrison said there was no evidence of ‘electoral interference’. But elections aside, there is a much broader question here about what these attacks might mean.

By being caught with its hands squarely in the cookie jar, this ‘sophisticated state actor’ guaranteed that its actions would garner global media attention. It has also, likely unintentionally, placed itself smack in the middle of an ongoing public debate about ‘foreign interference’ in Australia.

Let’s cut to the chase: Chinese state intelligence was probably involved in the breach. This was a sophisticated attack that used a suite of new malware and techniques that—at the time—weren’t detected by almost all malware-detection software. Building a new toolset of this type takes considerable time and effort, and although Russia, North Korea, Iran and Israel undoubtedly have the capability, Australia is simply not a high enough priority for those countries to expend their finite cyber espionage resources on this kind of advanced attack. The Chinese state, however, has the motive, the capability and an extensive track record.

But we will only know who is responsible for the attacks if the government chooses to tell us, and that’s where things get tricky.

The Australian government has been reluctant to ‘name and shame’ states engaged in cyber operations—what is known as ‘attribution’. It has formally blamed Russia several times for malicious cyber behaviour that hasn’t involved obvious Australian interests, but has named China only once. In that December 2018 attribution, which occurred after Chinese hacking in Australia that affected industry, universities and think tanks, the government focused on the theft of intellectual property for commercial gain and was drawing a distinction between ‘acceptable’ intelligence that seeks to uncover government or military secrets and ‘unacceptable’ intelligence for commercial advantage.

It is also notable that this formal attribution was conducted collectively with many other affected countries. Safety in numbers matters when China’s approach to international engagement is taking an increasingly coercive and vengeful tone. And let’s face it, while it may not be effective in dissuading further attacks, remaining silent is often the more palatable option from a political and diplomatic perspective.

So the first prerequisite for the Australian government to formally name the attacker would be for its purpose to have been ‘unacceptable’ espionage. In parliament and political parties there wouldn’t be much commercially valuable intellectual property at stake, but perhaps this attack could be a form of foreign interference?

It’s clear that this act of cyber espionage isn’t, in and of itself, an act of foreign interference. Intelligence, at least in Western countries, is typically used to gain insights and to inform our government positions and plans. From this perspective, the highest priority targets would be government departments and ministers, but it’s not hard to imagine how information about the powerbrokers and personalities of parliament could be used to refine and hone a foreign government’s posture and diplomatic approach.

Another possibility that doesn’t involve foreign interference is that the hacker was after our political parties’ campaign databases. There is already good evidence that Chinese state intelligence is hoovering up large datasets to enhance its intelligence-gathering and counter-intelligence efforts. If Chinese state intelligence was behind this attack, it’s possible that these comprehensive campaign databases could be a useful addition to the data they have already collected.

It is worrying, however, that the Liberal, Labor and National parties were targeted. The more that intelligence-gathering extends beyond government and parliament, the less likely it is that any intelligence gained will provide any insight into official government positions, and the more useful it would be for interference activities.

One way this espionage could be used for foreign interference is—as seen in the 2016 US presidential election—through the release of stolen campaign emails to damage a particular party or candidate and sway public opinion. But this tactic is now embedded in the public consciousness and our political parties and media could well respond in a way that is detrimental to the attacker.

But a far subtler, more covert, and much more difficult to detect form of foreign interference could be the use of the stolen information to identify politicians and staffers who may be susceptible to influence, enable future relationships with them and find points of leverage that might convince, cajole or coerce them into a supportive position. An in-depth understanding of our political parties and the machinations of parliament—the exact targets of this hack—would be far more helpful in enabling this kind of interference than it would be in illuminating our official decision-making processes.

Forensic investigation of these breaches is difficult and time-consuming, and the attacker took active steps to hide its tracks. The investigation is in its early stages, and the culprit may never be officially identified, but knowing what was stolen will be key to formulating a response and preparing for any interference that may occur in the future.

This attack may never be classified as electoral interference, but the very public statements made by Morrison in parliament—the scene of the crime—make it unlikely that it will be brushed under the carpet. While the short-term focus is on securing the systems in parliament and our political parties, we also need to face the far more difficult, long-term task of protecting our political systems and democracy from undue influence.

Editors’ picks for 2019: ‘Australian pilots hit with lasers during Indo-Pacific exercise’

Originally published 28 May 2019.

I recently sailed onboard the landing helicopter dock and Royal Australian Navy flagship HMAS Canberra from Vietnam to Singapore, as one of several academic sea-riders invited to observe Indo-Pacific Endeavour 2019 (IPE 19), which has now concluded after three months at sea.

A key question about this operation was what did the People’s Liberation Army Navy make of so much Australian activity in waters that China claims? Sailors tend to have a healthy professional regard for each other. The good news is that interactions between the RAN and PLAN remain cordial.

But we were followed at a discreet distance by a Chinese warship for most of the transit, both on the way up and back, despite the fact that our route didn’t take us near any feature occupied by Chinese forces, or any obviously sensitive areas. Bridge-to-bridge radio communications, I was told, while courteous, included requests for Australian warships to notify the Chinese in advance of any corrections to their course—something the RAN was not about to concede while exercising its high-seas freedoms.

The presence of our ‘trailing escort’—HMAS Parramatta apparently received similar attention from the PLAN—had no obvious effect on HMAS Canberra’s activities, including maintaining a brisk pace of flight operations. The army’s Tiger attack helicopters practised night flying and deck landings, as they start to develop a maritime role.

Some helicopter pilots had lasers pointed at them from passing fishing vessels, temporarily grounding them for precautionary medical reasons. Was this startled fishermen reacting to the unexpected? Or was it the sort of coordinated harassment more suggestive of China’s maritime militia? It’s hard to say for sure, but similar incidents have occurred in the western Pacific.

Since its first outing in 2017, IPE has become established as Australia’s roving vehicle for regional defence engagement, though it more closely resembles a set of separate port-based engagements than a rolling exercise at sea. The aim is to shape Australia’s strategic environment, with a heavy emphasis on defence diplomacy, to strengthen relations. Although delivered by a naval task group, the joint aspect of IPE 19 was emphasised by the fact that it was led by an air commodore.

Although IPE 19 was primarily focused on South Asia, for me this was an opportunity to experience a naval transit of the South China Sea (SCS), in the hope of demystifying that most commented-upon body of water. I’m grateful to the RAN for making that possible. While the transparency and openness I experienced onboard was impressive, the SCS remains something of an enigma.

The fact that IPE 19 incorporated a spur into the SCS is itself significant. Australia was literally going out of its way to include Vietnam in the activity.

The ADF’s military-to-military engagement with Vietnam was less evolved than with more familiar partners along the IPE route—but more interesting for being unfamiliar. One of Vietnam’s six Kilo-class submarines based at Cam Ranh Bay was conspicuously on hand to witness our departure. We then conducted a passage exercise with two Gepard-class frigates, the Vietnam People’s Navy’s largest warships. The Vietnamese went out of their way to engage in broader respects, including a rock-star welcome to ADF personnel on a school visit (many onboard ranked this as their personal highlight of IPE 19).

In addition, a small contingent of US Marines based in Darwin had embarked in Thailand. My first significant moment of IPE 19 came in Nha Trang (a popular recreation spot for US servicemen during the Vietnam War), where I witnessed probably the first US Marines, out of uniform but on active duty, to walk along that beachfront in nearly 50 years. Historical value aside, this was surely a significant defence diplomacy ‘effect’, sharpened by the fact that it was delivered, benignly, from an Australian amphibious assault ship.

It also says something that the US Marines were welcomed in Vietnam but didn’t go ashore in either Malaysia or Indonesia. Sensitivities—not only on the hosts’ part—can hopefully be salved so that the marines can in future interact with more regional partners, under an IPE aegis. It will take time for all concerned to become accustomed to US forces ‘plugging in’ to an Australian operational and diplomatic lead. But this kind of role reversal is in the long-term interests of the alliance, as Canberra steps up strategic engagement in the region.

My short time embedded with the RAN also made me reflect on how an inordinate academic and media focus on freedom-of-navigation operations, something I’ve contributed to, has distracted from more fundamental questions about Australia’s naval presence and willingness to operate in the SCS.

For a modest-sized navy, the RAN has been remarkably active across the SCS. HMAS Canberra transited from Cam Ranh to Singapore, accompanied by HMAS Newcastle (its final voyage before decommissioning). Meanwhile, HMAS Success (also about to be paid off) was participating in multinational ASEAN Defence Ministers Meeting (ADMM)-Plus exercises to the south. On our way to Singapore, we crossed paths with the Anzac-class frigate HMAS Parramatta, which was headed on a northeasterly track. HMAS Melbourne had passed through the SCS and Taiwan Strait only a few weeks earlier, on its way up to Qingdao and points east.

The ubiquity of PLAN vessels shadowing other warships in the SCS suggests that China’s surface force has grown big enough to be able to ‘close mark’ at will. Our transit coincided with multinational naval activity elsewhere in the South China Sea, including a US FONOP close to Scarborough Shoal. The PLAN was simultaneously participating in ADMM-Plus exercises to the south, alongside HMAS Success.

The fact that Chinese warships are shadowing their marks for longer distances suggests that the PLA’s over-the-horizon surveillance capability is also maturing. The large facility at Fiery Cross Reef sits at a prime gatekeeper location in the Spratly Islands, from which PLAN ships on ‘picket’ stations can be sent to intercept other vessels.

Although IPE embodies non-warlike missions, including humanitarian assistance and disaster relief, our transit through the most hotly contested body of water in the Indo-Pacific brought home the contrast between a naval task group operating under peacetime conditions, scattering and then reforming, and the more challenging scenario of sailing a naval task force into harm’s way, in a decreasingly permissive environment like the SCS.

Australia’s navy has gamely demonstrated its willingness to remain present in the SCS, operating in several locations at once. China has equally underlined that it can detect foreign warships and has the capacity to deploy screening forces across the SCS. That’s a sobering development.

If Australia continues to operate in the SCS in the long term, as I hope it will, its ability to do so will depend increasingly on the support of its allies and partners. This is not a job to do alone. IPE represents a head start on developing the defence and security partnerships that Australia needs to invest in for a less benign future.

Analysing Wang Liqiang’s claims about China’s military networks

After Wang Liqiang’s request for asylum in Australia, some commentators have cast doubt on his claims. Some of these doubts are rooted in a misunderstanding about Wang’s role, casting him as a professional intelligence officer when he has never claimed to be one.

China’s intelligence agencies are not like ours; the widespread use of cutouts and non-professional agents, the effect of well-connected princelings in the intelligence apparatus and the integration with business mark Chinese intelligence tradecraft.

But the most valuable part of Wang’s story has eluded attention—his accusation that Xiang Xin, a Hong Kong businessman he claims to have worked for, sits at the centre of a People’s Liberation Army network. Many of Xiang’s reported military links have already been uncovered by Taiwanese media.

The Taiwanese government moved swiftly to stop Xiang and his wife Gong Qing—also alleged by Wang to be an intelligence officer—from leaving the country after Wang’s story aired on Australian television. They are now under investigation. Last week, a senior Taiwanese government official told the New York Times that Xiang’s and Gong’s ‘relationship with China’s People’s Liberation Army was extraordinarily close’.

In 2008, Xiang’s main company, China Innovation Investment Limited (then known as Sino Technology Investments Company Limited) posted a notice to the Hong Kong Stock Exchange announcing it was establishing a defence technology investment fund with a remarkable steering committee.

The head was to be none other than Nie Li—China’s first female lieutenant general and an adviser to and former deputy director of a Chinese military defence technology agency, the Commission for Science, Technology and Industry for National Defense (COSTIND). She is also the daughter of one of the Chinese revolution’s most lauded marshals, Nie Rongzhen. The only other members of China Innovation’s steering committee were two retired major generals from COSTIND.

Wang has alleged that Nie Li and her husband, General Ding Henggao, sent Xiang to Hong Kong in 1993 as an intelligence officer. Ding was the director of COSTIND at the time.

A large body of open-source information also points to Xiang’s network. Aside from the steering committee’s three generals, at least six of Xiang’s associates can be linked to COSTIND:

  • His wife, Gong, worked in the China Defense Science and Technology Information Center. The centre was described in a US Congressional Research Service report as the public-facing name of COSTIND’s Intelligence Research Institute.
  • In 2005, Pang Weizhong was a director of SNG Hong Kong Limited, a company partially owned by China Innovation. Pang previously worked as an executive at two of COSTIND’s companies in Shenzhen, across the border from Hong Kong. Company documents show Pang has listed his address as a location that serves as the Beijing office of Xiang’s companies. He has also worked in a charitable scientific association that had Nie Li as its honorary president.
  • Li Tongyu was an executive director of China Innovation from 2003 to 2005. He has also worked for a state-owned missile manufacturer supervised by COSTIND since 1989. In 1999, he became deputy CEO of three COSTIND-linked companies in Hong Kong, including China Satellite Launch Agents. The company marketed the Chinese military’s satellite launch services to foreign clients and has been described by PLA expert James Mulvenon as ‘one of [COSTIND’s] most important companies’. Li is currently an executive at China Aerospace Science and Technology Corporation—China’s state-owned missile and satellite manufacturer—where he heads the Long March 11 rocket program.
  • Luo Xiuqing worked as a senior executive in two COSTIND-supervised defence companies before joining China Innovation as executive director and chairman from 2003 to 2005.
  • Wang Qingyu was non-executive director and chairman of China Innovation from 2005 to 2009. Before joining the company, he was president of a university administered by COSTIND and an executive in one of China’s largest arms manufacturers.
  • Guo Yijun has served alongside Xiang as a director of Takenaka Industry Company Limited in Hong Kong. He is also general manager of a Beijing company that is majority owned by a company set up by Xiang and his wife. A book chapter on China’s defence industry co-authored by Guo in 1987 indicates he worked in COSTIND. In 1994, he emerged as general manager of a company in mainland China established with funds from COSTIND’s best-known front company, New Era Group.

These examples show Xiang’s close ties to China’s defence system. His public biography is vague about his time in mainland China and simply notes that he graduated from Nanjing University of Science and Technology—then subordinate to COSTIND—and ‘has worked in a number of large organisations in the PRC’. But China Innovation’s investment activity—a litany of deals with Chinese defence companies such as Norinco Group—makes it clear that its focus is on technologies with military applications.

Perhaps the most intriguing part of Xiang’s story comes from his earliest days in Hong Kong. In 1994, just after he moved there, he established an investment fund called New Times First Capital, now called New Times Global Capital. Details about the fund are nearly impossible to find. However, the Panama papers, a massive leak of data on tax-haven companies, reveal that New Times Global Capital is registered to an address in the British Virgin Islands.

Xiang has primarily owned his companies through opaque firms registered in jurisdictions like Niue, Samoa and the Bahamas.

How were Xiang and Gong able to emerge from mainland China in the early 1990s with the funds to establish and acquire their companies?

New Times Global Capital’s name may offer one clue. In Chinese, it begins with the phrase Xinshidai, the same as COSTIND’s main front company, New Era, or Xinshidai, Group. New Times’ logo, used by most of Xiang’s companies including China Innovation, also has striking similarities to New Era Group’s.

Is it possible that Xiang Xin is using this iconography and hiring COSTIND veterans to give the impression that he and his companies enjoy COSTIND’s blessing? Maybe, but it’s unlikely that Nie Li, former deputy director of COSTIND, would head the steering committee of an investment fund set up by a company misusing COSTIND’s reputation.

After combining Wang’s allegations with scholarly studies of the Chinese military and Xiang’s publicly reported activities, a startling picture of Chinese military and intelligence activity emerges.

In the 1990s, China’s military was an ‘entrepreneurial army’ that became one of the country’s most important business actors. With COSTIND at the forefront of much of the PLA’s business activity, the military experienced skyrocketing levels of corruption and was prolific in its smuggling of everything from missiles to luxury cars.

In one case, military smugglers reportedly even opened fire on Chinese customs officials trying to intercept them. In this world, intelligence officers can be highly autonomous, run violent and messy operations, and have to build up their own networks of loyal adjutants without patrons in Beijing.

COSTIND also served as a central agency for intelligence on defence technology. Using the ‘New Era’ business empire as cover, COSTIND officers have even been accused of attempting to steal foreign military technology. Its companies in Hong Kong have been reported to be involved in brazen political interference. Liu Chaoying, the daughter of a PLA general who worked with Chinese military intelligence to funnel donations to the US Democratic National Committee in 1996, was an executive at the Hong Kong subsidiary of the state-owned missile manufacturer supervised by COSTIND.

As intelligence agencies pore over Wang Liqiang’s claims, they will likely find many of them difficult or even impossible to verify. But the insights he offers into an alleged Chinese military intelligence network require close and serious analysis of the type that ASIO has publicly said it is conducting.

How China’s 5G ascent could herald the end of US big tech

Countries’ 5G networks have become the subject of intense debate—and the Australian government can take some of the credit for that. Its decision to exclude high-risk vendors in August 2018 was marked by a refreshing openness about the grounds on which it was made. The thinking about risk and security was very similar to that in the EU security assessment of 5G released in October 2019.

Two core factors in these assessments are that 5G providers that have legal and other imperatives to cooperate covertly and deeply with their home governments pose a greater security risk than providers without these obligations and imperatives—and that governments do not want to be beholden to the governments of states with which they do not share values or interests. Both these factors apply in the case of the Chinese state and its two 5G ‘national champions’, Huawei and ZTE.

While there has been a burgeoning and critical debate inside and between governments, there’s been strikingly less talk about what the future 5G world means for ‘big tech’ in China and the US—the two homes of the globe’s tech giants.

That’s surprising, because arguably the strategic and economic competition between Xi Jinping’s China and Donald Trump’s America has at its centre a contest over advanced technology and the future of global data and communications. Xi’s China Dream can’t be achieved without China’s big tech firms dominating their US counterparts globally, because gaining strategic and economic power depends so heavily on having technological ascendancy, especially in data and communications.

But even without the state-on-state great-power competition, Alphabet (Google’s parent company), Amazon, Apple and Microsoft all have existential stakes in the future of global communications. The odd thing is they don’t seem to be acting like it.

If, as some experts predict, Huawei and ZTE win the race to build and operate much of the world’s 5G infrastructure, US tech firms will be dependent on them to transmit their services and products. American big tech will live in a Chinese walled garden of technology and be subject to the curators’ choices about what it can and can’t do, at least in major markets like Southeast Asia, Africa and chunks of Europe.

On the flip side, China’s non-5G tech giants Baidu, Alibaba and Tencent (BAT) will ride on the digital infrastructure of Huawei and ZTE. Given the Chinese Communist Party’s digital authoritarian model of fused state–corporate cooperation, this puts BAT in an advantageous position—not just in the China home market, but wherever the Chinese 5G champions provide the digital infrastructure.

The worst-case scenario for big US tech is that Apple, Facebook and Google in effect become apps inside a Chinese global information ecosystem. Chinese state policies and BAT, Huawei and ZTE would decide which of their products and services can be hosted on Chinese digital infrastructure and services. That looks like a very bad business plan, unless entering bankruptcy or becoming CCP-compliant in your global operations is the end goal.

So far, Apple’s and Google’s forays into 5G have been about 5G smartphones—which will also ride on the underlying 5G infrastructure.

So why are these US tech giants seemingly snoozing at the wheel on 5G and future communications infrastructure? Maybe they’re like great white sharks, lurking deep but ready to break the surface and show us that they knew what they had to do all along. But there’s no sign of that.

Maybe they’re planning to get a jump on 6G, thinking that new communications concepts and systems—like cheap and ubiquitous constellations of small satellites—will deliver a new source of communications business advantage that undercuts terrestrial 5G networks.

Maybe the real reason Google insisted on continuing to develop the now apparently defunct model of its search engine—Dragonfly, which was being designed to comply with Chinese state censorship—is because it’s preparing for the corporate dystopia of the future, not just trying to find a way to get bigger in the Chinese market.

Maybe they all think the competition between the US and China is just the business of governments and therefore doesn’t concern them. If so, they’re failing to see that the same factors which are driving renewed great-power competition mean that they too are in strategic and economic competition not just with BAT, Huawei and ZTE, but with their chief supporter, the CCP.

Or maybe they’re stuck in a mindset that governments around the world already know is dead: the idea that globalisation is a process that ‘de-states’ the world, rendering state boundaries and powers less relevant. According to this long-gone vision of globalisation, companies and consumers could be ‘country agnostic’ about where services and products came from because global supply chains and capital would move and reconfigure in ways that had no little or connection with individual nations.

That was the arc of logic operating in much of the world politically and economically until the return of assertive authoritarian power—Russia, and now, most particularly, the Chinese state under Xi. And the truly globalised world was the dominant paradigm when many of the leaders of US big tech rose to prominence, so it wouldn’t be surprising if they’re finding it hard to let go. For all their genius, they too are products of their environment and their times.

Xi and great-power competition—along with ‘Made in China 2025’, the Digital Silk Road and military–civil fusion—have killed that vision.

There’s a way out of the Chinese walled garden for Alphabet, Amazon, Apple and Microsoft. These companies have enormous capital and human capital strengths. And they have potential 5G, data and communications partners in places other than China—Samsung in South Korea; Japanese tech giants like Sony, NEC and Fujitsu; Europe’s Nokia, Ericsson and even Siemens; and US partner-competitors like Qualcomm and Oracle (as well as India’s growing tech world).

Certainly, democratic governments from Canberra to Washington, Seoul, Berlin, Delhi and Tokyo all have deep interests in creating policy and regulation that supports alternatives to a unitary Chinese tech future. Fraying international cooperation, the disdain for Trump in much of Europe, and Trump’s own disdain for alliances and partnerships make these interests harder to give effect to. Yet letting those difficulties prevent positive action to shape our future communications world would be a defining and generational error for each of the democratic world’s leaders.

Big tech companies and their home governments outside the authoritarian world need to reset their relationship from a contested one around privacy, data and regulation to one that supports government and corporate strategic and competitive interests. That seems a remote prospect in the world we’re in right now, but what seems remote has a habit of happening when the need is sufficient.

Even without supportive policies and regulation from their home governments, it makes sense as a simple matter of future corporate existence, success and competition for the US tech giants to be able to live on alternative digital infrastructure to that brought to them by China Tech Inc.

Who from Alphabet, Amazon, Apple and Microsoft will be the first to get this party started?

A return to diplomacy could save China from itself

Zhou Enlai, China’s first premier, was arguably one of the best diplomats of the 20th century. Maintaining connections between the outside world and a revolutionary government that had thrown out the baby, the bathwater and the bath was an astonishing feat. He achieved this through intellect and diplomatic skill.

Where are Zhou’s successors?

With its economic power and growing strategic weight, China is acquiring the kind of national power that should generate mutually favourable outcomes without recourse to subversion.

But to do this, China needs to build its authority, the critical concomitant of power that gives power political and strategic effect. Having built its authority in the aftermath of World War II, the US was able to back its power, thereby acquiring the legitimacy needed for it to claim global dominance. President Donald Trump is well on the way to forfeiting that, something that China has not been slow to exploit. But China shows no signs of having studied the consequences of using power without authority or legitimacy.

China demands respect but is quite practised in dishing out disrespect. The ham-fisted shenanigans of Chinese diplomats as they forced the exclusion of Taiwan from the Kimberley Process ‘blood for diamonds’ conference in 2017, shouting down the conference convenor as he tried to introduce Foreign Minister Julie Bishop, was consistent with Chinese officials forcing their way into the office of Papua New Guinea’s foreign minister during the 2018 APEC meeting in Port Moresby.

Sullen and offensive behaviour by officials is one thing. It is altogether another for a diplomatic mission to interfere directly in the conduct of politics within the host nation, if that is indeed what the Chinese embassy in Canberra has done. Recently retired ASIO boss Duncan Lewis has claimed that China’s foreign interference operations, designed to ‘take over’ Australia’s political system, are ‘insidious’.

China has shot itself in both feet.

Beijing’s apparent efforts to plant the equivalent of a Manchurian candidate in the Australian parliament were as clumsy as they were ambitious. This maladroit attempt to play into Australia’s domestic politics has been exacerbated by the emergence of a self-confessed ‘spy’ who has burst onto the scene with stories of espionage and dirty tricks in Hong Kong, Taiwan and Australia.

China’s domestic paranoia, and the patronage system that sustains it, have infected the way it does business globally. The Belt and Road Initiative appears to support debt-trap diplomacy, though it is important to note that commentators are divided on whether debt is the objective of the BRI or simply a consequence of poor management.

But China’s woes in Australia and along the Belt and Road are small beer given what’s been happening closer to home. Months of demonstrations in Hong Kong against Chief Executive Carrie Lam’s government and the extraordinary landslide in favour of the pro-democracy groups in the recent district council elections demand a major international relations rethink in Beijing. It will take more than President Xi Jinping’s inscrutable smile to get China’s ship of state back on course.

Given China’s economic power, getting it back on course is very much in Australia’s and the region’s interests. As former Office of National Assessments director-general Allan Gyngell has pointed out, like it or lump it, China will remain central to Australia’s future.

Prime Minister Scott Morrison may find the espionage reports deeply disturbing, and Senator James Paterson may regard attempts to shoe-horn an agent of influence into federal parliament as worse than he thought. But expressions of dismay do little more than encourage public apprehension and a return to the ‘reds under the bed’ phobia of the 1950s. Anxiety is no substitute for policy.

Peter Hartcher’s excellent Quarterly Essay, Red flag: waking up to China’s challenge, makes serious suggestions about the direction that Australia’s China policy might take. But it doesn’t tackle the basic mindset issues that colour so many aspects of our international policymaking—our deep sense of insecurity and lack of confidence as an international player.

China’s international behaviour reflects its friendlessness: it relies on bullying and bluster, subornation and subversion rather than negotiation and persuasion. That is self-defeating.  A return to diplomacy would serve its interests and the interests of the global community. And that’s where Australia and a coalition of like-minded countries can have a positive effect. Diplomacy, in the words of the diplomatic theorist Ernest Satow, is ‘the application of intelligence and tact to the conduct of official relations between the governments of independent states’. For an embattled China, conversation at all levels is preferable to confrontation.

An adroit, engaged diplomacy is the challenge for both China and Australia.

Beijing needs to change tack in wake of Hong Kong elections

Make no mistake about it; Hongkongers’ overwhelming vote on 24 November was a clear and unequivocal repudiation of Beijing and its appointed government here in the territory. It was a rejection of police abuses and repression, and an irrefutable popular endorsement of the demands of the protesters, if not their violent tactics.

Beijing can try to dismiss or downplay the results. The Chinese Communist Party’s media mouthpieces can hyperventilate about ‘foreign interference’, ‘intimidation’ by protesters and mythical voting irregularities. And the humiliated, routed pro-China parties here, seeing their ranks on the local councils decimated, can try to spit mathematical hairs, arguing, for example, that the pro-democracy forces ‘only’ won 60% of the vote—as if 1.6 million people voting and a 71.2% turnout amount to anything other than an electoral landslide.

But all spin aside, there is no mistaking that the pro-China bloc in Hong Kong took a drubbing of monumental proportions. The only question remaining is how Beijing’s communist rulers and their anointed minions running Hong Kong will respond to this expressed will of the true silent majority. The choice is either reform or further repression.

For many who know China and its rulers, the clear answer is repression—and they recall the brutal crackdown of June 1989, when troops of the People’s Liberation Army crushed the last major pro-democracy uprising by massacring hundreds, if not thousands, of young protesters who had occupied Tiananmen Square. The Tiananmen massacre, which Beijing has attempted to erase from the collective consciousness ever since, stands as a testament to how far a tyrannical autocratic regime will go to maintain power.

But another, more recent event in China offers a parallel path, showing that when faced with a challenge to its authority, China’s rulers can also be adept at accommodation and compromise to defuse a crisis. Instead of Tiananmen Square in 1989, I am thinking of Wukan in 2011.

Wukan is a small fishing hamlet in southern Guangdong Province where, in late 2011, villagers fed up over the seizure of their land revolted, chased communist party officials and police out of the village, and took control of the local government.

Rather than move in with force to crush the village uprising, the central government eventually sent in the provincial party secretary of Guangdong, Wang Yang, who was seen at the time as a leading economic reformer. Wang made significant concessions to resolve the weeks-long uprising, including freezing some of the land deals at the heart of the dispute, releasing jailed villagers from custody and sacking some recalcitrant local officials.

In other words, the central authorities admitted that the local officials had erred, launched an investigation and basically ceded to the protesters’ demands.

It was a pattern I had seen often while covering China as a correspondent from late 2009 until 2013. For example, when faced with a series of labour strikes and widespread worker unrest in 2010 and 2011, Chinese authorities responded first with the police, sparking violence clashes, but eventually urged localities and provinces to raise the minimum wage for workers. The unrest was soon defused.

In 2009, a 19-year-old man named Sun Zhongjie, working as a driver for a construction company, was fined for operating an ‘illegal taxi’ after giving a lift to a man who flagged him down on the road. The Shanghai traffic police were running a sting operation against unsuspecting motorists, and Sun—fined the equivalent of $2,000 and fired from his job—made a dramatic public declaration of his innocence by chopping off his little finger. After Sun’s case sparked an uproar on social media, he won his case and didn’t have to pay the fine, and hundreds of other drivers who had been ensnared in the scheme received refunds.

Since the Tiananmen massacre and the advent of the internet, China’s authoritarian rulers have held to power with far more than just the barrel of the gun. They have become adept at keeping track of public opinion through a vast network of monitoring centres at universities and state-run news agencies, following all the trending discussion online and trying to steer local officials to defuse potential crises before they erupt.

Of course, there are major differences between the situation in China now and even a few years ago. President Xi Jinping, who has eliminated term limits, effectively allowing him to rule for life, seems far less interested in compromise and concessions than his predecessor Hu Jintao. As seen by his actions in Xinjiang with the internment of a million Uyghurs in concentration camps, Xi seems more interested in ruling through power and fear than negotiation.

Also, since that relatively open 2010–2013 period, Beijing’s stifling of the internet has been nearly complete. Weibo, once a freewheeling platform for debate, is a shell of its former self. Online dissent can be more quickly snuffed out. The media is more strictly controlled than ever. Even virtual private networks used to bypass the censors are more difficult to use.

But that crackdown on the internet and the media brings its own problems for China’s leadership— like leaving them unaware of the depth of popular discontent in Hong Kong.

There has been some informed speculation that China’s leaders, and particularly Xi, were unpleasantly surprised by the outcome of the Hong Kong vote and the overwhelming defeat of the pro-China camp. According to this widely held view, officials in Hong Kong were assuring Beijing that a ‘silent majority’ was opposed to the protests and backed the government and police.

One thing that has become certain over the years is that China’s rulers do not like to be surprised.

With the depth of dissatisfaction in Hong Kong now made abundantly clear at the ballot box, China and Xi now face a choice—whether to double down on repression or listen to the people and opt for a new course that will require some compromise.

The contours of the compromise have been apparent for months. Hapless Chief Executive Carrie Lam and her incompetent cabinet and advisers must go. An independent commission must be empowered to investigate the violence and excessive force used by the Hong Kong police against the protesters. A ‘truth commission’ must probe the causes of the unrest and offer amnesty for any protesters who didn’t injure anyone or cause serious property damage—and that would mean releasing most of the thousands arrested on ‘rioting’ charges.

And finally, Beijing needs to respond to the people’s clear aspirations for autonomy by announcing a relaunch of the long-stalled political reform process, with a promise to eventually allow all Hongkongers a vote on their leader.

Whether Beijing will choose the reform path remains to be seen. Like with the change to the opening and reform policy in 1979, China’s communist leaders have shown they can deftly shift positions and adapt when they need to. And in Hong Kong right now, shifting and adapting is what they clearly need to do.

The abnormal normal of icy times with China

The ‘new normal’ of Australia’s relationship with China is that it will be marked by ‘enduring differences’. That’s the outlook offered by the secretary of the Department of Foreign Affairs and Trade, Frances Adamson.

It’s a candid description of what has been an icy couple of years between Canberra and Beijing, frosting diplomacy and chilling strategic perspectives. The fifth China–Oz icy age is changing the way the two nations regard each other.

The balance point between row and kow-tow is being reset.

Peering into the future, Adamson explained at Senate estimates in October what Australia and China face:

[I]t will be a relationship where we will need, on both sides, to work quite hard to manage what I really think will be enduring differences. Some points of difference may come and go and be able to be resolved, but other points of difference which go more deeply to the differences between our systems and our values are likely to endure. It should, therefore, not be surprising in my view that a relationship where there are points of difference, some of which are actively canvassed in the public domain—and whilst I don’t particularly like the term—is the ‘new normal’.

In the multipolar Indo-Pacific, Adamson said, Australia’s vision of an ‘open, inclusive, peaceful region’ will sometimes bump against China pursuing objectives ‘contrary to ours’.

Read on from that ‘new normal’ statement by our top diplomat for a mutual musing between Adamson and shadow foreign minister Penny Wong on how Australia’s polity sees the changing dynamic.

Last week, the polity got another ‘wake-up call’ when the counterespionage agency, ASIO, stated that it ‘takes seriously’ and is investigating a series of claims about the scale of Chinese espionage, including the explosive story that China offered $1 million to get a candidate elected to the Australian parliament.

A Manchurian candidate for the House of Representatives is, indeed, the new abnormal.

The twin questions confronting Australia are: Can we live with the authoritarian superpower? And, can we live without the nation that’s so essential to our economy?

Those questions frame a new Quarterly Essay by journalist Peter Hartcher—Red flag: waking up to China’s challenge. He writes that the challenge is whether Australia is tough enough to deal with China’s attempt to impose its power and influence:

The choice for Australia is not the one we’re always being told we have to make—between America and China. It’s the choice between the status quo, a wilful complacency, on the one hand. And, on the other, taking action to preserve our liberties from Chinese intrusion and American unreliability.

The essay had its Canberra launch in Parliament House last Tuesday, by former prime minister Kevin Rudd, who warned that Australia’s economy is too ‘China dependent’.

Echoing Hartcher, Rudd said for too long Australia had been ‘complacent in anticipating and responding to the profound geopolitical changes now washing over us with China’s rise, America’s ambivalence about its future regional and global role, and an Australia which may one day find itself on its own’.

Hartcher illustrates the China challenge with a series of ‘hits’ experienced by some of Australia’s most senior politicians.

In 2013, the hit to Treasurer Joe Hockey was China’s finance minister’s brazen demand to buy 15% of each of Australia’s top 200 companies (the maximum stake for a state-owned foreign investor).

In 2016, the hit to shadow defence minister Stephen Conroy was the threat that Labor would lose a $400,000 political donation if he didn’t soften his line on challenging China in the South China Sea.

In 2017, the hit to top leaders of the Labor Party was the threat from a member of China’s politburo to mobilise the 1.2 million ethnic Chinese living in Australia to vote against Labor, if it opposed legislation for an extradition treaty with China.

China’s power quest is causing pushback from Singapore to Sweden, but Hartcher writes that Australia has been a ‘canary in the mineshaft’ as it has moved to respond and recalibrate. China buys a third of everything Australia sells to the world and the realisation has hit that ‘getting rich with China means getting ready to be pressured by China’.

To confront the Manchurian candidate threat, Hartcher says all Australian MPs and senators should be required to submit to a formal ASIO security clearance. He says the new normal is forcing an end to Oz complacency:

Australia needs to concentrate on strengthening itself, making itself armour-plated against foreign subversion, so it can engage confidently with China and the world … Whenever Australia is asked to choose between China and America, the ultimate answer must be that we choose Australia.

Listen to the ASPI interview with Peter Hartcher below.

China joins the global disinformation order

China’s global disinformation campaign—which recently painted Hong Kong’s democracy advocates as violent and unpopular radicals—should cause concern for democracies around the world. In addition to highlighting the many ways in which technology can be used to suppress freedom of speech, China’s ascent to the global disinformation order demonstrates a deeper insidious trend: governments increasingly see social media as a powerful tool to manipulate public opinion both domestically and abroad.

At Oxford University, we have tracked how governments use social media to spread computational propaganda. Over the past three years, we have found evidence of disinformation campaigns run by state actors in more than 70 countries around the world. Many of these countries are authoritarian regimes that use networks of fake accounts to spread pro-government propaganda, drown out opposing voices, and threaten activists and journalists with hate and violence. But the case of China is particularly worrying.

The Chinese government has a long history of censorship and information control. Even before ‘fake news’ was weaponised by US President Donald Trump, Chinese officials used the term to crack down on political dissent and discredit opinions that challenged the position of government. And it has become well known that fake online commentators—employed by the Chinese government—are responsible for fabricating hundreds of millions of online posts on Chinese native platforms every year to divert criticism away from the state. But until recently, China’s disinformation efforts have largely remained within the boundaries of its Great Firewall.

Before the Hong Kong protests, Chinese foreign influence operations were small in scale and relatively unsophisticated. We know they used crudely automated accounts to attack political figures in Taiwan, and have targeted social media disinformation campaigns against Falun Gong and Tibetans in exile. But now—with Facebook, Twitter and Google taking down hundreds of accounts, pages and channels operated by the Chinese government—China has demonstrated its capability and willingness to target global audiences with disinformation.

China’s quick, calculated and deliberate rise to the global disinformation order has two implications for democratic societies.

First, despite the numerous countries experimenting with computational propaganda, China is poised to become the next disinformation superpower. China has quickly become a global leader in artificial intelligence. Combined with the vast amounts of data collected from China’s social credit system and critical infrastructure rollouts around the world, AI will boost the state’s ability to target, tailor and amplify disinformation campaigns.

Democracies already have to contend with disinformation from domestic sources, as well as a growing number of sophisticated actors using social media for foreign influence operations. China—along with its technological prowess—is a significant player in the disinformation realm.

Second, China’s disinformation campaign against protesters in Hong Kong shows that we are still stuck. We remain beholden to social media firms to tell us when there is trouble, and not all governments are committed to combating disinformation.

Major technology firms don’t always stand up to China, so it is a great sign that they have exposed such interference. But independent researchers are still on the outside, unable to look under the bonnet because the most valuable data about public life remains in private hands. The question of public funding for better elections administration is on hold in the US. Highly trusted public broadcasters in many countries, which effectively inoculate the public against a lot of misinformation, have shrinking budgets.

There are a host of good ideas for using social media to strengthen democracy. Facilitating ‘data donation’ by users, contributing data to public archives, and setting up industry-funded but independent auditing bodies would all help put civic life back into social media.

But until the technology giants become better corporate citizens and politicians commit to securing elections, voters in democracies will remain soft targets for computational propaganda—from a growing number of countries with increasingly sophisticated technologies.

Chinese espionage in Australia—the big picture

Melbourne car dealer Nick Zhao may or may not have been approached by Chinese state operatives offering $1 million for the Liberal Party member to run for parliament. He’s dead and a coronial inquiry is underway. The new head of the Australian Security Intelligence Organisation, Mike Burgess, has said that ‘Australians can be reassured that ASIO was previously aware of matters that have been reported today, and has been actively investigating them.’ That’s good, if sobering, news because it tells us the allegations published in The Age and Sydney Morning Herald and aired on 60 Minutes are credible.

And apparent defector Wang Liqiang may or may not be an intelligence operative who worked for the Chinese Communist Party to compromise and disrupt pro-democracy students and groups in Hong Kong and who ran similar activities to disrupt Taiwan’s democracy. Wang has also reportedly said spies from Beijing were ‘operating with impunity in Australia’.

On Zhao, details are sketchy, so we’ll need to hear the results of the coronial inquiry and ASIO’s investigation.

With Wang, however, his account of the Chinese state’s covert work to interfere in Hong Kong and in Taiwanese and Australian politics came with reams of public detail. What he’s revealed aligns well with things we already know about Chinese intelligence work. What’s new is that he’s added important details on individuals, companies, places, times and activities which can be followed up. For ASIO, this will provide leads to better understand and disrupt this covert and corrupting Chinese state activity.

We can be pretty confident Wang is who he says he is and the Chinese agencies, companies and operatives he worked with did what he says they did. That’s even more likely given the Chinese embassy’s rapid denouncement of Wang that quoted a hastily issued statement from Shanghai police after Wang’s allegations were first reported. There’s no record of his supposed fraud conviction before the statement was issued and it seems like the kind of coverup you’d expect when a Chinese intelligence operation is compromised.

What does all this mean? Put bluntly, it shows that outgoing ASIO boss Duncan Lewis was spot on when he observed in September that terrorism had plateaued as a threat, but foreign interference was ‘on a growth path’. He noted that, ‘Unlike the immediacy of terrorism incidents, the harm from acts of espionage may not be present for years, even decades, after the activity has occurred. These sorts of activities are typically quiet, insidious and have a long tail.’ That’s an insight our political leaders and the broader Australian public need to take to heart.

Let’s suppose the alleged plan to get Zhao into parliament had actually worked. He would’ve been a Liberal backbencher working diligently on constituency issues in the Melbourne seat of Chisholm and showing his potential. Two or three elections from now, he might have aspired to an outer ministry and later, perhaps, higher things. An ability to bring in plenty of cash to the party over that time, no doubt with help from his Chinese government handlers, wouldn’t have hurt. That’s the kind of ‘long tail’ damage Lewis was talking about.

Every Australian political party now needs to take the threat of Chinese covert interference in our democracy seriously and work with government agencies to reduce the prospects that our public debate and our parliamentary decision-making will be compromised. It’s not undemocratic for the Greens, the Liberals, Labor and the Nationals to take advantage of the knowledge and expertise of Australia’s national security agencies.

In the face of well-organised and lavishly funded interference from President Xi Jinping’s powerful authoritarian state it’s essential to protect the vibrancy and independence of our political system. It’s also worth noting that our Australian Chinese community is not even the most likely place to look for political figures who might be candidates for long-term cultivation.

Nowadays, it’s almost routine for former politicians and senior civil servants involved in the public debate on China to be performing advisory work for or receiving sponsorship from Chinese entities. Many of these entities are harmless, but some, no doubt, have close links to CCP institutions that these public voices and the Australian public need to understand, not dismiss. Remember it was the scandal around former Labor senator Sam Dastyari—not a Chinese Australian—that crystallised a series of events ending in the passage of the foreign interest transparency law by a thumping bipartisan majority in August last year. That law doesn’t yet cover politicians and their staff—a glaring gap that must now be closed.

Finance Minister Mathias Cormann was right to say we would be ‘getting a bit ahead of ourselves’ to suggest the government complain to Beijing over the allegations about Zhao. Refreshingly, he went on to say that ‘issues will arise that need to be dealt with and where there is bad and inappropriate conduct, we will call that out and seek to have that addressed’. He emphasised that ASIO’s investigation needs to take its proper course.

In contrast to the case of Chinese state hacking into our parliament and three major political parties earlier this year, once this investigation is complete Burgess needs to take the same approach he took as head of the Australian Signals Directorate and come out of the shadows. That’d be best done with him sitting in a booth in parliament while Prime Minister Scott Morrison or Home Affairs Minister Peter Dutton makes a public statement on the topic.

The sensitive and corrosive issue of Chinese state interference in our democracy needs to be handled in a calm and orderly way. At the same time, the government must be honest and open with the Australian people about the challenge we are facing and how it is being dealt with.

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