Research by Chinese scientists in Australian and other Five Eyes nations’ universities increases China’s military capability and is not in our national interest.

China sends its military scientists into our universities for one reason—because it helps the PLA become a more capable force.

We need clear government policy, implemented by our universities, to prevent those institutions from increasing China’s military capacity—because, unlike the US, China does not share Australia’s strategic interests and is a potential adversary.

Some 2,500 People’s Liberation Army (PLA) scientists have been placed in Western universities since 2008 to engage in research with international partners in these universities.

Two Australian universities—the Australian National University and the University of New South Wales—are in the top 10 for PLA collaboration, measured by the number of peer-reviewed publications co-authored by Chinese military scientists and overseas researchers between 2006 and 2017.

Since 2007, we estimate the Chinese military has sent some 300 military scientists to Australia—fewer than the 500 who have been sent to each of the US and UK, and around the same number as were sent to Canada over the period.

Research areas Chinese military scientists have been involved in in Australia include satellite navigation, remote sensing, supercomputing, signal processing and cryptography. These areas of research are all directly relevant to a military’s ability to succeed during conflict and war.

Satellite navigation technologies and knowledge underpin precision weapons’ ability to hit targets. Remote-sensing technologies help identify targets, sift those targets from civilians, friendly forces and background ‘clutter’, and then guide weapons to hit their targets.

Supercomputing has applications from developing nuclear weapons to making sense of large volumes of data. Signal processing has a key role in intelligence collection from all kinds of electronic systems, from communications to missile guidance systems. Cryptography is at the heart of securing military and state secrets.

It’s not just the ANU and UNSW—other Australian universities have had Chinese military scientists work with them, including the University of Sydney and the University of Wollongong.

As my ASPI colleague Alex Joske’s ground-breaking international research report says, the Chinese military refer to what they’re doing as ‘picking flowers in foreign lands to make honey in China’.

It’s hard to see a clearer statement that these research placements are viewed by the PLA as creating value for the Chinese military.

The Chinese military sends its best and brightest, all of whom are Chinese Communist Party members, overseas. They do this because these military scientists learn new skills and engage in research of value to the PLA. They also establish enduring personal and professional research partnerships that continue to benefit the PLA over many years.

The reaction to Joske’s report by some academics has been to say that there is no problem with any Chinese scientists working in Australian universities—either because the research is in its early stages, or because all the research is peer-reviewed and the results are published openly.

This entirely misses the point of the value to the PLA of its military scientists working in our universities.

It seems that 100% of Chinese military scientists sent to overseas universities through this program returned to work for the PLA. These scientists then go on to win prizes for the excellence of their work in increasing PLA capability.

China’s National University of Defence Technology recommends that when choosing where to study overseas, military scientists’ first priority should be the relevance of the research direction of an overseas institution to their work for the PLA.

This Chinese military university tells researchers being placed in our universities that they should ‘fully take advantage of the cutting-edge research conditions and environment abroad’ and ‘map out the arrangements of their overseas research and their plans after returning to China’.

Chinese military researchers clearly benefit from the experience, skills and relationships they gain from their time in Australian and other international universities. Raising the capacity of PLA scientists in and of itself increases the military capability of China’s military.

China is not an adversary of Australia’s, but it is a country with a leadership with whom we do not share strategic interests. China’s militarisation of the South China Sea, its repression of its own citizens through mass surveillance and censorship of free speech, and internment of some one million of its Uyghur citizens in re-education camps show important differences between our two countries.

If the leadership in Beijing continues to use its growing military, political and economic power coercively at home and around the world, the strategic differences between China and Australia will only deepen.

There is no clear government policy in Australia or internationally on university research cooperation with the Chinese military. Current defence controls are mainly backward-looking about technology—controlling systems and items that already exist—rather than about the creation of knowledge and new technologies with strong military uses.

Whatever our own scientists think, the PLA has judged that sending its best and brightest young scientists into our universities is a key way for it to gain a future advantage in warfighting.

We need to take that judgement seriously, and be very clear that it is not in Australia’s interests to help the Chinese increase their military capabilities—either by giving their military scientists skills and knowledge that allow them to create new systems for the PLA, or by the direct work they do with our own researchers.

We spend hundreds of millions of dollars protecting high-end military systems like the joint strike fighter, Collins-class submarine, Growler electronic attack aircraft and JORN over-the-horizon radar from compromise by the militaries of countries including China and Russia.

The research that led to the creation of these advanced platforms was undertaken in universities decades ago.

In the language of international technology and export-control machinery, the PLA is an end user that we should prevent from gaining access to the skills or knowledge that help it become a more capable military force, given we know that through Beijing’s civil–military fusion agenda, it seeks a strategic military advantage over the US and its allies (including us).

It’s not our job to help Beijing achieve this.

Research underway now in our universities will be the source of our future military advantage. At the moment, we aren’t doing anything like enough to protect that research so that Australia and our allies— instead of potential adversaries—reap the benefits.

The debate about the Quadrilateral Security Dialogue revived as Quad 2.0 has been centred largely around perceived negatives: the harm it could cause rather than what it can really contribute to regional security. Those assumptions are based on perceptions (or, more correctly, misperceptions), whereby the Quad is seen as too confrontational towards China as well as challenging the centrality of ASEAN. These views have been so strong that much of the debate about the Quad has been about explaining what it is not, or not intended to be, rather than articulating what it is and understanding its broad objectives.

But my latest ASPI study—the first quantitative survey on the perceptions of the Quad in the Southeast Asian foreign and defence policy community—demonstrates that these negative views aren’t necessarily correct, nor are they the prevailing wisdom.

While some in Southeast Asia are more concerned about the Quad’s detrimental influence on the centrality of ASEAN, most survey respondents believe that the Quad actually complements the ASEAN-centred regional framework. The study found that Indonesians and Singaporeans are relatively more sceptical of the Quad than other ASEAN respondents, who were decisively more supportive of the initiative as a positive contribution to the region’s wellbeing.

A total of 44% of all ASEAN respondents saw the Quad as complementing the existing ASEAN security frameworks, while 21% thought it challenges ASEAN-led architecture. The biggest supporters of the Quad are those who value its potential role in maintaining security and stability—the Vietnamese and Filipino respondents.

A total of 36% of respondents saw the Quad as a necessary ‘anti-China bulwark’, while 21% believed that to view the Quad in that way is dangerous. Interestingly, none of the Vietnamese and Filipino respondents saw the ‘anti-China bulwark’ view of the Quad as a dangerous development, compared with 50% of Singaporean and 37% of Thai respondents who thought the Quad could foster a potentially confrontational atmosphere in the region.

Survey respondents saw value in the Quad members’ engagement in regional security even if that risks being viewed as confrontational towards China. A decisive majority (69%) of respondents expressed the hope that the Quad can contribute to enforcing the rules-based order, particularly in relation to territorial and maritime disputes. These findings contradict the popular commentary that the Quad should restrict its activities to non-controversial tasks, such as humanitarian assistance and disaster relief. Southeast Asians clearly prefer a mechanism that would help preserve adherence to the rules-based order and international law.

The survey of Southeast Asian attitudes points to some key challenges for the evolution of the Quad. The lack of clarity about long-term objectives among Quad members themselves presents as the biggest concern for the formation’s future. A total of 48% of respondents expressed concern that the interests of Quad members are too divergent and their mission is unclear. Provoking China was a secondary consideration.

On the question of whether the Quad should be expanded, 68% of respondents thought it was a bad idea as it could undermine the need to establish a convergence of interests and objectives. Some of the respondents elaborated, saying that they think that the Quad should avoid becoming ‘another ASEAN’.

Based on these findings, Quad members and their regional partners—including ASEAN states—should focus more on exploring beneficial forms of cooperation. As a first step, the Quad nations need to agree on a set of common objectives and actionable goals. They need to recognise that while there is a considerable appetite for a successful Quad, there will be little continued enthusiasm if the Quad fails (again).

Given that most ASEAN respondents think that the Quad actually complements the existing regional architecture, the report recommends that ASEAN leaders explore channels for cooperation and coordination, particularly in the areas where there is broad consensus. After all, Southeast Asia as a whole needs to make more of an effort to sustain peace, stability and prosperity—not less. Quad members, in turn, should recognise the centrality of ASEAN’s role and not seek to create another ASEAN-like institution in the region.

To read the full report’s analysis and recommendations, click here.

On a recent official visit to China, Malaysian Prime Minister Mahathir Mohamad criticised his host country’s use of major infrastructure projects—and difficult-to-repay loans—to assert its influence over smaller countries. While Mahathir’s warnings in Beijing against ‘a new version of colonialism’ stood out for their boldness, they reflect a broader pushback against China’s mercantilist trade, investment and lending practices.

Since 2013, under the umbrella of its ‘Belt and Road Initiative,’ China has been funding and implementing large infrastructure projects in countries around the world, in order to help align their interests with its own, gain a political foothold in strategic locations and export its industrial surpluses. By keeping the bidding process on BRI projects closed and opaque, China often massively inflates their value, leaving countries struggling to repay their debts.

Once countries become ensnared in China’s debt traps, they can end up being forced into even worse deals to compensate their creditor for lack of repayment. Most notably, last December, Sri Lanka was compelled to transfer the Chinese-built strategic port of Hambantota to China on a 99-year, colonial-style lease, because it could longer afford its debt payments.

Sri Lanka’s experience was a wake-up call for other countries with outsize debts to China. Fearing that they, too, could lose strategic assets, they are now attempting to scrap, scale back or renegotiate their deals. Mahathir, who previously cleared the way for Chinese investment in Malaysia, ended his trip to Beijing by cancelling Chinese projects worth almost US$23 billion.

Countries as diverse as Bangladesh, Hungary and Tanzania have also cancelled or scaled back BRI projects. Myanmar, hoping to secure needed infrastructure without becoming caught up in a Chinese debt trap, has used the threat of cancellation to negotiate a reduction in the cost of its planned Kyaukpyu port from US$7.3 billion to US$1.3 billion.

Even China’s closest partners are now wary of the BRI. In Pakistan, which has long worked with China to contain India and is the largest recipient of BRI financing, the new military-backed government has sought to review or renegotiate projects in response to a worsening debt crisis. In Cambodia, another leading recipient of Chinese loans, fears of effectively becoming a Chinese colony are on the rise.

The backlash against China can be seen elsewhere, too. The recent annual Pacific Islands Forum meeting was one of the most contentious in its history. Chinese policies in the region, together with the Chinese delegation leader’s behaviour at the event itself, drove the president of Nauru—the world’s smallest republic, with just 11,000 inhabitants—to condemn China’s ‘arrogant’ presence in the South Pacific. China cannot, he declared, ‘dictate things to us’.

When it comes to trade, US President Donald Trump’s escalating trade war with China is grabbing headlines, but Trump is far from alone in criticising China. With policies ranging from export subsidies and nontariff barriers to the theft of intellectual property and tilting the domestic market in favour of Chinese companies, China represents, in the words of Harvard’s Graham Allison, the ‘most protectionist, mercantilist, and predatory major economy in the world’.

As the largest merchandise exporter in the world, China is many countries’ biggest trading partner. Beijing has leveraged this role by employing trade to punish those that refuse to toe its line, including by imposing import bans on specific products, halting strategic exports (such as rare-earth minerals), cutting off tourism from China and encouraging domestic consumer boycotts or protests against foreign businesses.

The fact is that China has grown strong and rich by flouting international trade rules. But now its chickens are coming home to roost, with a growing number of countries imposing antidumping or punitive duties on Chinese goods. And as countries worry about China bending them to its will by luring them into debt traps, it is no longer smooth sailing for the BRI.

Beyond Trump’s tariffs, the European Union has filed a complaint with the World Trade Organization about China’s practices of forcing technology transfer as a condition of market access. China’s export subsidies and other trade-distorting practices are set to encounter greater international resistance. Under WTO rules, countries may impose tariffs on subsidised goods from overseas that harm domestic industries.

Now, Chinese President Xi Jinping finds himself not only defending the BRI, his signature foreign policy initiative, but also confronting domestic criticism, however muted, for flaunting China’s global ambitions and thereby inviting a US-led international backlash. Xi has discarded one of former Chinese strongman Deng Xiaoping’s most famous dicta: ‘Hide your strength, bide your time’. Instead, Xi has chosen to pursue an unabashedly aggressive strategy that has many asking whether China is emerging as a new kind of imperialist power.

International trade has afforded China enormous benefits, enabling the country to become the world’s second-largest economy, while lifting hundreds of millions of people out of poverty. The country cannot afford to lose those benefits to an international backlash against its unfair trade and investment practices.

China’s reliance on large trade surpluses and foreign-exchange reserves to fund the expansion of its global footprint makes it all the more vulnerable to the current pushback. In fact, even if China shifts its strategy and adheres to international rules, its trade surplus and foreign currency reserves will be affected. In short, whichever path it chooses, China’s free ride could be coming to an end.

The relationship between the Australian and Chinese governments would benefit from a clearer declaration from Australia about what is and is not in our national interest in engaging with the Chinese state and economy.

This is a particularly timely requirement given that President Xi Jinping’s re-energised Communist Party has clarified the Chinese state’s intent and behaviour in ways that show that the time of its peaceful rise is over.

A declaratory policy is just a way of saying what you do and don’t want, and what you will and won’t do, so that others know what to expect and can shape their own policies and actions accordingly.

Such a clear policy can be implied from government decisions and statements and from laws passed by the Australian parliament. Rather than leaving it to be understood from the pattern of individual decisions, a statement setting it out simply would provide a framework to help manage future issues.

Without such a framework, each Australian decision can be characterised as a new ‘test’ of the bilateral relationship—whether on foreign investment, security or defence relations, or on whether to prosecute foreign interference or implement, say, the laws regulating research partnerships.

Each decision can look like a chance to send a message, or to give a little back if the previous one was maybe perceived as harsh. That creates the risk of an ad hoc transactional approach. Commentators and critics then read the tea leaves of each decision for symbolism about overall policy directions and the ‘state of the relationship’.

It makes everything a more febrile, exciting and open adventure than a more sober analysis would suggest. Great for the commentariat, but bad for government to government relations.

Let’s look at overall policy settings and big decisions on China and what declaratory policy flows from them. First on foreign investment and trade.

Australia is open for business. Our two-way trade with China focuses on resources, agriculture and services (notably tourism and education). This is mutually beneficial, as Australian businesses earn strong revenue and our Chinese customers receive world-class resources, goods and services at competitive prices.

But economists and strategists learned from the global financial crisis that it’s a mistake to carry too much risk in any asset area.

So, Australia will seek to diversify its economic and trade relationships to reduce its reliance on China as the single customer.

Trade diversification is an old strategy for Australia that’s becoming newly relevant. It was a major theme when the UK joined the European Economic Community—another example of our reliance on a large single customer being bad economics and bad strategy.

Peter Varghese’s India strategy sets out the contribution that a growing relationship with India can make to such diversification. Prime Minister Scott Morrison’s visit to Indonesia around the free trade agreement is another element of that strategy.

On investment, most foreign investment into Australia, whether from China or elsewhere, is approved by the Foreign Investment Review Board process. According to FIRB annual reports, in the 10 years to the end of 2016–17, four business proposals were rejected (two on Ausgrid, one on Graincorp and one on the ASX) and 169,178 were approved.

The small number of foreign investment decisions rejected (and others given a ‘preliminary view that they were contrary to the national interest’) from Chinese entities are important, however, in establishing a policy. Key examples are the Ausgrid decisions and the Kidman Holdings decisions. In the Ausgrid case, Chinese bids were rejected as contrary to the national interest.

In the case of Kidman Holdings, in April 2016 the then treasurer, Scott Morrison, gave his ‘preliminary view’ that the original bid from Dakang Holdings, a Chinese-owned entity, was contrary to the national interest. That meant that if it proceeded, it was very likely to be rejected. A new bid involving Gina Rheinhart and a Shanghai firm was accepted, with property straddling the sensitive Woomera Prohibited Area in South Australia excised from the transaction.

There’s little doubt that if the leasing of Darwin port was being decided in 2018, the Chinese entity Landbridge would not have got its 99-year lease.

On telecommunications infrastructure, the government has advised Australian telcos that suppliers subject to extrajudicial control by governments won’t be able to supply 5G systems within Australia. That has excluded Chinese telcos Huawei and ZTE.

Public statements on our approach to foreign investment review and critical infrastructure are reassuring about openness to investment and explain in detail that any rejections are decided case by case, subject to the nature of the asset and transaction, with no one-size-fits-all approach. That repeats the longstanding approach of testing all foreign investors’ proposals against Australia’s national interest.

But these public statements provide scant explanation of the few important rejections.

The sense I make of it—and which I’m sure the leadership in Beijing gets too—is that we’ve reached a point in Chinese investment in Australia’s critical infrastructure, energy and communications sectors where further aggregation and large market penetration by Chinese-owned entities is not seen as being in our national interest.

As with trade, this is probably as much about cumulative business risk from reliance on a single source of investment as it is about strategic interests. The net effect, though, looks pretty firm from a policy perspective. Let’s say so.

Second is the new foreign interference legislation. As Malcolm Turnbull said when he introduced it last December: ‘[Q]uestions of foreign interference are not all about China—far, far from it. Globally, Russia has been wreaking havoc across the democratic world.’

But it’s equally clear that events like the controversy over former senator Sam Dastyari, combined with testimony on the threat from foreign interference and covert influence by the head of ASIO, created the foundation for this legislation to be passed by both sides of politics.

The policy here is in the law itself. Quoting Malcolm Turnbull again: ‘Media reports have suggested that the Chinese Communist Party has been working to covertly interfere with our media, our universities and even the decisions of elected representatives right here in this building. We take these reports very seriously.’ He also said: ‘[W]e will not tolerate foreign influence activities that are in any way covert, coercive or corrupt. That is the line that separates legitimate influence from unacceptable interference.’

The only further clarity we could provide is to prosecute a Chinese national for covert interference or espionage. That may come, noting that both Russia and the US do often prosecute Chinese nationals for such things.

Lastly, there’s the issue of the defence relationship and the pursuit of capability advantage by the ADF and by the PLA. Here also there’s some clarity. We seek a defence relationship where we can engage each other to increase understanding, and we each seem willing to exercise together in ways that don’t give away real capability insights.

There’s no prospect of the Chinese giving us technological or intelligence insights into the PLA’s weapons systems, cyber capabilities or even strategic intent (apparently they don’t conduct cyber espionage for economic advantage now).

Similarly, Australia won’t share JORN over-the-horizon radar, CEA radar, or the joint strike fighter or future submarine technologies with the PLA. That’s because we are not allies and we have markedly different strategic interests. We each know that it’s not in either of our interests to advance the military reach and capabilities of the other. Again, let’s say so.

That will have consequences for research partnerships and for particular types of students in Australian universities. China would never allow Australia (or the US, Japan, France, Germany, the UK …) to put military or other national security individuals in its key military research institutions or in universities that are creating the next wave of technical advantage (with both civil and military applications).

Australian policymakers, universities and the public need a much clearer, more honest and intellectually rigorous discussion about what the Chinese military and the research community tied to that military are seeking to achieve here and in other nations through their research partnerships and student placements.

To date, the Defence Trade Controls Act 2012 seems to have resulted in not one refusal of a research proposal involving the Chinese military on national security grounds, maybe because it relies on universities’ self-assessment of national security risk.

Doctoral and post-doctoral researchers from China who have access to cutting-edge research in STEM that has military applications will apply that knowledge for PLA purposes. We’re fooling ourselves if we think that PLA students studying explosives technologies or quantum computing would be doing so for peaceful purposes.

Given Xi’s agenda of using civil–military fusion to create strategic and military strength through next-generation technologies, it’s hard to see that research partnerships contributing to the PLA’s capability agenda are in our national interest.

A clear declaratory policy on China around economics and security would look a bit like this:

• We want to continue our close and growing economic relationship because it’s to both countries’ benefit. We get high-quality resources and education and tourist services at competitive prices. We get revenue and economic activity that’s important to our society.
• We gradually diversify our economy to reduce the business and strategic risks from relying too heavily on a single country. That will make us a more resilient economic partner.
• We welcome debate and exchanges of views as part of our politics and national decision-making. However, we won’t tolerate foreign influence activities that are in any way covert, coercive or corrupt.
• On investment in critical infrastructure, energy and telecommunications, we’ve reached a point of cumulative investment where further large-scale investment by Chinese entities isn’t in our national interest.
• We’re in favour of defence cooperation, but only as a reflection of shared strategic interests.
• We’re happy to engage in a defence relationship that increases understanding of each other’s intent and creates habits of communication so that tensions can be resolved and the prospects of conflict between us reduced.
• We won’t help China increase its military capabilities because we’re seeing that how it is beginning to use them, most obviously in the South China Sea, isn’t in the interests of Australia or the region. Here, our countries’ strategic interests are in direct tension, given the direction of Chinese policy and action.
• We also don’t support plans to create military advantage for the PLA through next-generation technologies, so our economic and research interactions will have limits in that key area.
• Overall, we seek a mature, respectful relationship between our nations, in ways that enhance the prosperity and security of our region and the world. Clarity on where our interests work together—and where they don’t—is an important step in building this relationship.

If such a declaratory policy were in place, Australian ministers wouldn’t be as hostage to pressure (as much from the various wings of Australia’s commentariat as from Chinese authorities) on individual decisions.

As an example, the treasurer’s forthcoming decision on the bid by CKI holdings to acquire a large stake in Australian electricity and gas distribution systems would already be clear—and future such bids would be unlikely.

Let’s take the heat, light, noise and excitement out of the relationship by establishing a clear, declared policy that governs our approach to the economic and strategic relationship with the Chinese state. It won’t be new news to Beijing and the CCP leadership, but it will make our government’s deliberations and public statements easier.

It will also be a welcome relief to both sides of politics to have a clear bipartisan approach.

This may well encourage similar clearer declarations from other nations facing similar tensions and competing interests in their own relationships with the Chinese state and economy.