August 2018

Essays

John Garnaut

Australia’s China reset

Xi Jinping at Parliament House, 2014. © Stefan Postles / Getty Images

The rest of the world is watching how we counter Beijing’s campaign of influence

It’s no secret that Professor Francis Fukuyama got it wrong in his classic “End of History” treatise, published in the dying days of the Cold War. More interesting is why he got it wrong. His conclusion that the Western model of democratic liberalism had triumphed – once and for all – came after watching Chinese students experience life at American universities.

“There are currently over 20,000 Chinese students studying in the U.S. and other Western countries, almost all of them the children of the Chinese elite,” he wrote. “It is hard to believe that when they return home to run the country they will be content for China to be the only country in Asia unaffected by the larger democratizing trend.”

Fukuyama penned his “The End of History?” essay, the basis for the subsequent best-selling book, as the Chinese student democracy movement was coming to life in the northern hemisphere winter of 1988–89. In hindsight, this important strand of his argument was dead before the 1989 summer issue of The National Interest magazine hit the newsstands. It was crushed beneath the tanks on the eve of June 4 and buried on June 9, when Deng Xiaoping blamed the “turmoil” on a failure of “ideological and political education”. The Chinese Communist Party (CCP) has been strengthening and expanding its ideology, propaganda and security apparatus ever since.

In 1989 the Party established a network of Chinese Students and Scholars Associations, as New Zealand scholar James Jiann Hua To has detailed in his groundbreaking book Qiaowu. The following year, China’s State Education Commission convened meetings of education counsellors in Chinese embassies to expand their influence over student organisations and to isolate and eliminate “reactionary factions”. In 1994 the Propaganda Department kicked off a campaign to channel the frustrations of China’s young people against the liberal West. And so it has continued, layer upon layer, sector by sector, to prevent exactly the kind of regime suicide that Fukuyama had envisaged.

Fukuyama got it wrong – perhaps we all got it wrong – because he underestimated the capability and the determination of the CCP’s leading families to keep themselves in power.

The children of the party elite at Harvard, Oxford and Sydney have not returned to liberalise China, because their parents have made sure of it. They made sure that China’s ever-expanding interactions with the outside world could not lead to democratisation in China. Indeed, under the uncompromising leadership of President Xi Jinping, the reverse is more likely to be true. Security measures conceived as being “defensive” in Beijing can quickly become invasive and offensive when given extraterritorial reach. The rolling revelations about Russia’s efforts to help Donald Trump into the White House have served to illustrate that foreign interference is not an abstract problem.

Belatedly, and quite suddenly, political leaders, policy makers and civil society actors in a dozen nations around the world are scrambling to come to terms with a form of China’s extraterritorial influence described variously as “sharp power”, “United Front work” and “influence operations”.

The United States, Malaysia, Taiwan, Singapore, Germany, France, the United Kingdom, Pakistan, Sri Lanka, New Zealand, Vanuatu and the Solomon Islands are all manoeuvring to renegotiate the terms of their China engagement. A dozen others are entering the debate. But none of these countries has sustained a vigorous conversation let alone reached a political consensus. So far, only one country has done both of these things – the one country that might seem least likely.


Australia’s China paradox

No country has benefited as clearly from its relationship with China as Australia. Our society has been enriched by waves of Chinese migrants and sojourners since the 1850s gold rush. Today our communities are energised and enhanced by 180,000 students, 1.2 million tourists annually and another 1.2 million residents with Chinese ancestry, who have mostly thrived and been welcomed in their new country.

It is hard to think of any two economies in the world that are more complementary. The Chinese tourists and students have offset the waning of China’s resource-intensive construction boom, which boosted Australia’s national income by 13 per cent and helped it sail through the global financial crisis. Last year, Australia posted a bilateral trade surplus of almost $50 billion.

And yet, despite China’s enormously positive contributions, the Australian media has become globally renowned for exposing the darker dimensions of the country’s international reach.

Reports have shown that the CCP is systematically silencing critics in Australia and co-opting Chinese-language media here to present favourable views. The party is “astroturfing” grassroots political movements to give the impression of Chinese community support for Beijing’s policies and leaders, while drowning out opponents. CCP-linked organisations are crowding out independent opportunities for ethnic Chinese political representation. They are channelling business and other professional opportunities to retired politicians and other influential Australians.

In 2015 the Australian Security Intelligence Organisation (ASIO) reportedly warned the major political parties that two of Australia’s most generous donors had “strong connections to the Chinese Communist Party” and that their “donations might come with strings attached”. In December 2017, an unsourced report in The Australian said ASIO had identified candidates at state and local government elections whom it believed had close ties to Chinese intelligence services “in what security officials assess as a deliberate strategy by Beijing to wield influence through Australian politics”. Most notoriously, a Labor Party senator, Sam Dastyari, was forced to retire after Fairfax Media revealed that he had recited Beijing’s South China Sea talking points while standing alongside a Chinese citizen donor – and then counselled the donor to place his phone aside to avoid surveillance of their conversation.

CCP interference reportedly grew so blatant that party officials used their arbitrary power over Australian prisoners in China and their capacity to influence elections in Australia as sources of diplomatic leverage. According to The Australian, China’s security chief, Meng Jianzhu, warned the Labor leadership about the electoral consequences of failing to endorse a bilateral extradition treaty: “Mr Meng said it would be a shame if Chinese government representatives had to tell the Chinese community in Australia that Labor did not support the relationship between Australia and China.”

In the background, the Turnbull government had been working through the implications of a classified cross-agency report into foreign interference that it had commissioned before the media maelstrom, back in August 2016. “It’s fair to say that our system as a whole had not grasped the nature and the magnitude of the threat,” said the prime minister in December 2017. “The outcomes have galvanised us to take action.”

All of this collided with an unexpected by-election in the North Sydney seat of Bennelong – the electorate that has the highest proportion of ethnic Chinese voters in the country – just as Malcolm Turnbull was introducing long-promised counter-interference legislation at the end of last year.

The media reports, security agency warnings, policy responses, and political attacks and counter-attacks generated heat but also shed light on a hidden world of inducements, threats and plausible deniability that Western Sinologists, diplomats and national security officials had not focused on before. They also generated a backlash among sections of the business, academic, legal and ethnic Chinese communities, who said that fears of CCP interference were exaggerated, the tenor of public discussion could fan racism and social division, and the proposed expansions of intelligence and enforcement powers were dangerous and unwarranted.

China experts, including former senior officials, lined up on both sides, with duelling petitions. Business leaders blamed the government for junking the China relationship as they braced for retaliation. A former ambassador to China, Geoff Raby, even called for the foreign minister, Julie Bishop, to resign.

These are the ingredients that have turned Australia’s efforts to reset the terms of its China engagement into a global spectacle. “Australia calls itself a civilized country, but its behaviour is confusing,” said an editorial in the Global Times, the notorious Chinese state-run tabloid. “While it is economically dependent on China, it shows little gratitude.”

What is distinctive and objectionable about China’s efforts to gain international influence? What are its methods and objectives? And how can Australia retain its character as an open, multicultural democracy while pushing back against a rising authoritarian superpower that is the source of so many of its migrants and one in every three of its export dollars?

The world will soon find out.

In June this year, after six months of vigorous negotiations and often-acrimonious debate, the Turnbull government’s amended counter-interference laws gained Labor Party backing and passed through the parliament. The China reset had begun.


Colliding with reality, one story at a time

I returned to Beijing in 2007 thinking I knew something about the place, having lived for a stint in the Australian embassy as a child. My main task as a Fairfax correspondent was to explain the Chinese resources boom and where it might be heading. I thought the Western media was too fixated on China’s human rights problems and underplayed the economic progress being made.

And it was true that politics didn’t colour everything in China. The labour market was tightening, wages were rising, and citizens were exploiting a degree of economic empowerment outside the political system they had not known before. But my belief in the primacy of economics over politics was gradually knocked out of me, one story at a time.

I had seriously underestimated the extent to which the CCP had inoculated itself against the values and institutions of the European Enlightenment that underpinned the development of capitalism in the West. The tools of coercion, co-option and deception that had proven so effective in revolution were still hardwired into the governing system. If I was going to know anything about China’s economic impact on Australia, I needed to understand the political machine. I turned to the Australian Chinese community to begin my education.

In 2008, a talented Chinese-Australian writer, Henry Yang (Yang Hengjun), warned that the Party was mobilising thousands of red-flag-waving students to march on Parliament House in Canberra to “defend the sacred Olympic torch” en route to Beijing. It turned out that a thousand of those flags had been sponsored by a Chinese-Australian billionaire businessman who ran a Beijing-friendly newspaper in Sydney – and who had also become a leading donor to Australia’s major political parties.

Professor Feng Chongyi, a renowned expert on CCP politics and Chinese civil society at the University of Technology Sydney, pointed out the links between such businessmen and a political influence system called the United Front. Others explained the intricacies of the Party’s over-developed intelligence system and how its networks of informants, co-optation and intimidation reached into Australia’s business and Chinese-diaspora communities.

The organisational linkages were usually opaque. Government ties to any particular action were always plausibly deniable. But it looked like the Party was systematically leveraging China’s economic links with the outside world to export its systems of political control.

From 2009, a series of successful Chinese-Australian entrepreneurs were targeted by the Chinese security system in ways that other Australians were not. Mining executive Stern Hu was arrested in the midst of a struggle over Australia’s foreign investment policy and the pricing system for iron ore. I came to believe that Stern Hu probably did commit financial crimes, from what could be gleaned about proceedings in a politicised and closed-door court. But the same could not be said for the e-tourism magnate Matthew Ng, university proprietor Charlotte Chou or cardiac surgeon Du Zuying, who had built a multimillion-dollar biomedical empire. They were each jailed on fanciful charges, stripped of their assets, and mistreated until breaking point during interrogations.

Henry Yang told me that if foreign governments could not fight to protect their own citizens, by pressuring Chinese officials to uphold their own laws, then what hope could Chinese citizens have? Then he was himself detained.

Relentlessly, and through a thousand different channels, the Party was working to collapse the categories of “Chinese Communist Party”, “China” and “the Chinese people” into a single organic whole – until the point where the Party could be dropped from polite conversation altogether. From there, the Party’s critics could be readily caricatured as “anti-China”, “racist” or even “Sinophobic”. And it was only a short logical step to claim all ethnic Chinese people as “sons and daughters of the motherland”, even if that meant undermining the rights that ordinarily came with Australian citizenship. It seemed Beijing had convinced Canberra that it was in Australia’s interests to look the other way,

In 2013 – as the new ruler, Xi Jinping, was tightening his grip over the military – I attended the Bo’ao Forum at Hainan Island, where a new high-level Australia–China business forum had come into being. The Australian delegation was headed by iron-ore magnate Andrew Forrest and facilitated by Geoff Raby, who had established a successful consultancy in Beijing. The forum included a who’s who of Australian corporate life, including the heads of Qantas, the Business Council and four of the big five banks. But the backstory was more interesting.

The forum had been shaped at a meeting with a group of Australians hosted by Deng Xiaoping’s daughter Deng Rong and the then vice premier Wang Qishan at Zhongnanhai, the CCP leadership compound in Beijing. This much was clear from a photograph publicised on the website of an obscure organisation called the China Association for International Friendly Contact. In the far corner of this photograph, however, was a plain-dressed man whom several of the Australian delegates could not recall meeting. His name was Xing Yunming and his position was listed as the association’s executive director. What the association did not disclose, and what no official government document disclosed, was that Xing Yunming was also a two-star lieutenant general in charge of an enormous but little-known military intelligence agency known as the Liaison Department of the General Political Department of the People’s Liberation Army.

The PLA Liaison Department is the only intelligence agency in the CCP system – and possibly the world – that is custom-designed to perform international influence operations. The association that was hosting the Australian business delegates was the Liaison Department’s primary Western-facing front organisation. Earlier, this front organisation had achieved success in hosting top-level retired US generals and gaining their agreement to lobby Pentagon officials and pen opinion articles in support of specific PLA objectives. None of the Australian delegates I spoke to said they knew anything about the military intelligence background of their hosts.

The challenge of charting the organisational labyrinth that sits behind the PLA’s Liaison Department – and the Party’s patronage networks more generally – led me directly to circles of “princelings” who saw themselves as the Party’s true custodians. Their competing claims for power and influence were anchored in the heroic contributions that their fathers had made to Mao’s revolution. It took months, and sometimes years, but gradually they shared their histories and aspirations and introduced me to one another. Once again I turned to the community of Chinese Australians for knowledge and guidance.


History is a mirror

The three senior princelings who sat in the seven-man Politburo Standing Committee from 2012 were the sons of men who did not earn their seats at the revolutionary head table by feats of military prowess on the battlefield. Rather, Xi Zhongxun (father of President Xi Jinping), Huang Jing (father of Yu Zhengsheng) and Yao Yilin (father-in-law of Wang Qishan) were masters of United Front work and earned their stripes by massaging and manipulating the language, perceptions and actions of the Party’s adversaries. Xi Zhongxun, for example, fomented a mutiny behind enemy lines in the early 1930s. He kept this line of “enemy work” responsibility right up until the 1980s, when he attended the inauguration of the PLA intelligence front that later hosted the Australian businessmen at the Bo’ao Forum. The children inherited not only their party status but also their work specialisation.

United Front work is a methodology and strategic framework for exploiting the internal divisions of adversaries. The strategy involves forming tactical alliances with secondary adversaries in order to isolate, “struggle against” and crush a designated primary enemy. Historically, the Party’s leading agents were trained in the Soviet Union, and its institutional and ideological structures were grafted directly from the Comintern. Those structures were infused with a distinctly classical Chinese tradition of statecraft and they evolved to meet different challenges. The most important institutional difference between the Chinese Communist Party and its Soviet ancestor was the CCP’s massive expansion of its “united front” system during the protracted anti-Japanese and civil wars of the 1930s and 1940s. What began as a Leninist tactic was bureaucratised in China as a central United Front Work Department and an outward-facing analogue, the Chinese People’s Political Consultative Conference.

The point is that United Front work was instrumental in winning the revolution and remains instrumental in defending and extending the interests of the Party today. The CCP’s contemporary leaders see themselves as masters of persuasion, just like their revolutionary forefathers. Xi and Yu have both described United Front work as one of the Party’s “magic weapons” – on par with the military – just as Mao did during the revolutionary period. For them, the exploits of their ancestral past provide a “mirror” for the future.

The Party’s contemporary institutions, ideology and methodologies continue to reflect its origins as an underground organisation. The essential facts are engraved in the CCP’s Organisation Chart. None of the Party’s core externally facing departments are service-delivery portfolios like health, or education, or finance. Nor are they responsible for ordinary diplomacy. Rather, the Propaganda Department, the United Front Work Department and the International Liaison Department – and also important departments of the People’s Liberation Army – all engage in United Front work (typically known as “political warfare” in the military and “people-to-people diplomacy” in the International Liaison Department). They routinely deploy a range of non-conventional tools – including covert operations aided by intelligence agencies such as the Ministry of State Security – to influence the perceptions and internal decision-making of foreign actors. All of the Party’s 86 million members are expected to take on United Front responsibilities in their dealings with non-party members. In short, influence work is the Party’s stock-in-trade.

I continued probing these systems of influence after returning to Australia in 2013, as Xi was revealing his uncompromising inclinations. I watched as Beijing’s aggressive United Front work triggered backlashes in both Hong Kong and Taiwan. But it was also extending into Australia’s Chinese communities, university campuses, businesses, political organisations and media houses. In late 2015 I left journalism to work as an adviser to Prime Minister Turnbull, before being hired by the Department of the Prime Minister and Cabinet to work on a project the following year.


Authoritarian onslaught

The CCP’s international influence system is a complex, subtle and deeply institutionalised set of inducements and threats designed to shape the way outsiders talk, think and behave. The modus operandi is to offer privileged access, build personal rapport and reward those who deliver. It seeks common interests and cultivates relationships of dependency with chosen partners. The Party uses overt propaganda and diplomacy, quasi-covert fronts and proxies, and covert operations to frame debates, manage perceptions, and tilt the political and strategic landscape to its advantage.

Beyond the foundational assumption of a single, civilisational “China”, the specific demands of United Front work are framed by permutations of three narratives: China is inherently peaceful and beneficent, the growth of Chinese power is inexorable, and China is vengeful and dangerous if provoked.

These narratives are internally contradictory but consistent over time. The first two are delivered openly by leaders, diplomats and state propaganda. The third is usually delivered via back channels with plausibly deniable connections to the state: PLA “hawks”, specialist military hardware websites, academic forums, personal meetings with top leaders, editorials in the Global Times. Together, this messaging orchestra is designed to condition audiences into believing that the rewards are great, resistance is futile, and outright opposition may be suicidal.

The meta-narrative of Beijing’s ever-growing power is the drumbeat that accompanies China’s policies of territorial coercion across its southern and eastern seas. It is the subtext that persuades foreign governments to remain silent as Beijing abandons restraint in the restive borderlands of Tibet and Xinjiang. It is also the incentive for economic beneficiaries to avoid seeing, or to rationalise, or to even actively support the Party’s efforts to degrade the values and institutions of civil society.

There are two countries on China’s periphery that present the clearest case studies. They both have majority ethnic Chinese populations. They both have enormous trade and investment integration with China. And they have both been dealing with these challenges for their entire existence but are only now beginning to feel the force of Beijing’s power.

The first is Taiwan, the vibrant self-governing democracy that exists with only partial international recognition, and has been the focal point of China’s external influence system since 1949. The Chinese bureaucracy has a ministry-level Taiwan Affairs Office that is responsible for integrating an enormous array of United Front measures across different party platforms and down to local government level. These activities were greatly intensified under a pro-unification Kuomintang president, Ma Ying-jeou.

But then, in March 2014, the seemingly inexorable momentum towards integration on Beijing’s terms was derailed by a network of committed students. They occupied Taiwan’s Legislative Yuan for 24 days and filled it with sunflowers, symbolically bringing sunlight to the opaque world of cross-strait affairs. The students drew 500,000 people onto the streets in solidarity. The Kuomintang government was thrown out in a landslide, prompting Beijing to tilt the balance from co-option to coercion.

The number of Chinese tourists plunged as much as 42 per cent following the 2016 election of President Tsai Ing-wen, as Beijing worked its carefully structured group tourism controls. The vast United Front organisational infrastructure has been mobilised to demonstrate China’s leverage, encourage a sense of social and political chaos in Taiwan, and project a sense of inevitability about Taiwan’s “absorption” into the mainland.

Every time the US makes an overture of support – a new piece of legislation or a high-level visit – Beijing responds by tightening the screws. And Beijing has resumed plucking off Taiwan’s remaining allies one by one.

In May I attended a closed-door forum hosted by the Taiwan Foundation for Democracy that was publicly opened by the deputy foreign minister, François Chih-Chung Wu. He set aside diplomatic platitudes to issue this plea for international help:

“In Taiwan, and in countries elsewhere, China moves from soft power to sharp power, and then to hard power. And it is becoming more brazen every day … In other countries, this process may begin with a Confucius Institute, scholarships, grants, but the next thing you know you must self-censor discussions China considers sensitive … In the face of this authoritarian onslaught of China’s misinformation, cyber hacking, bribery, economic coercion, theft of technology, and intrusion in internal politics – Taiwan is crucial. If it can hold on, other democracies will be able to hold on. But if it fails, there will be no security for the democratic governments of the world.”


Big fish, little fish – and shrimp

More surprising is the careful but unmistakable pushback from Singapore, the tiny island state that was conceived when foreign-backed insurgents were causing havoc across South-East Asia. The first signal of intent was a press release from Singapore’s Ministry of Home Affairs in August 2017, announcing that a Chinese-born US citizen, Professor Huang Jing, would be expelled from the country for allegedly being an “agent of influence for a foreign country”.

Like many in the field, I had known Professor Huang Jing reasonably well. He had also featured heavily in Australia’s China conversation. In 2015 he’d given a keynote speech at an Australian university about President Xi’s foreign policy ambitions. At the time he was expelled from Singapore, he featured on the cover of an Australian magazine. Earlier, when I was a journalist in Beijing, he had offered me insights into the opaque world of elite Chinese politics.

The Singaporean government’s media statement didn’t mention China by name. But it highlighted how Huang’s position at the prestigious Lee Kuan Yew School of Public Policy gave him a platform for shaping public opinion and a doorway into Singapore’s foreign policy–making establishment: “He gave supposedly ‘privileged information’ to a senior member of the Lee Kuan Yew School, in order that it be conveyed to the Singapore Government. The information was duly conveyed … The clear intention was to use the information to cause the Singapore Government to change its foreign policy.”

The statement noted that the Singaporean government declined to act on this “privileged information”, then continued: “Huang used his senior position in the Lee Kuan Yew School to deliberately and covertly advance the agenda of a foreign country at Singapore’s expense. He did this in collaboration with foreign intelligence agents. This amounts to subversion and foreign interference in Singapore’s domestic politics.”

What is striking about this official statement is that it makes detailed allegations relating to a form of espionage that sits a long way from the traditional Western counterintelligence agenda. The intelligence officers who were allegedly behind this operation were not stealing secrets. And nor were they aiming to directly control any policy lever. Rather, they were allegedly planting or nurturing a series of words and ideas in order to tilt the strategic decision-making landscape in a particular direction. They didn’t want to force Singaporean policy makers to make decisions in their favour. Rather, they wanted to condition policy makers to make such decisions of their own volition.

What specifically does the Singaporean government say the foreign power wants to achieve? We can only guess.

Singapore’s grand statesman, Lee Kuan Yew, had promoted activist foreign policies and internal resilience policies to survive as a “shrimp” in a hostile strategic sea. However, one month before Professor Huang Jing was expelled, his boss at the university, Kishore Mahbubani, had argued that post–Lee Kuan Yew Singapore should behave more like a “small state”, in the context of pressure from China over a series of issues including the South China Sea. “We should change our behaviour significantly,” Mahbubani said. He was roundly criticised by Singaporean officials and former officials before stepping down from his position as dean.

Mahbubani’s toughest critic was Singapore’s former top diplomat, Bilahari Kausikan. The retired foreign affairs secretary is old enough to recognise the return of some familiar patterns. In June, at a Singapore forum on Chinese “public diplomacy”, I watched as Kausikan joined a few more of the dots:

“China does not just want you to comply with its wishes. Far more fundamentally, it wants you to think in such a way that you will of your own volition do what it wants without being told. It’s a form of psychological manipulation.”

Kausikan’s speech was reprinted in only lightly edited form in the Singaporean government–friendly Straits Times. He pointedly referenced the case of Huang Jing, and he proceeded to identify a series of general messages and country-specific messages that China was deploying to “stampede your mind” into a “sense of fatalistic inevitability” about the false binary choices forced upon countries.

Most of these messages will be familiar to Australian readers: “America is the past, China is the future, so get on the right track”, “America is inconsistent but China is a geographic fact”, “Being close to America makes it difficult to have a close economic relationship with China”, “Singapore has no claims in the South China Sea, so why is the Singapore Government taking sides against China?”, “Relations were much better under Lee Kuan Yew because he understood China in a way that the present Singapore leadership does not understand China”, and “Singapore is a small country and it should not take sides against China”.


Breaking out of the binary trap

It was not by accident that Prime Minister Turnbull chose the Shangri-La Dialogue in Singapore in June 2017 to deliver a speech that sought to reframe the Australian strategic debate. And nor was he only being polite to his host when he opened by deferring to Lee Kuan Yew. Singapore’s early history and Lee’s pithy metaphors offered a vocabulary for the shades of real-world “grey” that exist between the binary extremes.

The prime minister told the gathering:

“In 1966, when Singapore was but a year old and Britain was beginning to consider its withdrawal of its military forces ‘east of Suez’, [Lee Kuan Yew] spoke about the strategic environment and cited the old Chinese saying ‘Big fish eat small fish and small fish eat shrimps’.

“Lee Kuan Yew discussed how the shrimp, as he modestly described his new nation, would survive. It could make itself unpalatable to the larger fish – by being self-reliant and strong. And it could make friends with other larger fish – strong alliances and collective security …

“As he told this forum in 2009, he devoted his life to creating the ‘political and economic space’ that was necessary to preserve ‘the freedom to be ourselves’.

“For the shrimp, the little fish and even the middle-to-large-sized fish of all dimensions represented here today, we face more than a Manichean choice between life and death, war and peace.

“The more salient question – even when the risk of war remains remote – is what kind of peace can we maintain?”

The Australian prime minister warned against countries seeking to win the regional strategic race through “corruption, interference or coercion”. He made three references to both foreign “interference” and “coercion”.

These “grey zone” themes and concepts informed the Foreign Policy White Paper of November 2017.

They also informed the counter-interference strategy and legislative framework that the prime minister presented to parliament on December 7, the last night of the parliamentary year.

The House of Representatives was virtually deserted following the successful passage of same-sex marriage legislation only minutes before.

A cluster of Coalition MPs had returned to fill the camera frame before rushing to catch their planes. The young SAS veteran Andrew Hastie was there, looking attentive. And on the other side of the chamber a sole Labor MP, Anthony Byrne, was sitting upright in the front row. They were respectively the chair and the deputy chair of the Parliamentary Joint Committee on Intelligence and Security. In the wings, over on the far side, I could make out the prime minister’s national security adviser, Justin Bassi, surveying proceedings and checking his phone. The press gallery was almost perfectly deserted. And so were the public gallery benches alongside me – with the exception of writer Clive Hamilton, who had shifted his focus from climate change to CCP interference.

Turnbull told the empty chamber that the government’s counter–foreign interference strategy would be built around a new legislative framework consisting of four bills.

The first introduced a radical new transparency scheme that would force former politicians, officials and others to register any ties to foreign states before engaging with the Australian political landscape. This “sunlight” scheme sought to apply “basic principles of disclosure to allow the public and policymakers to assess any underlying agenda”.

The second bill introduced tough but graduated new criminal provisions for the kinds of interference activities being uncovered by the Mueller investigation in the United States. “We will criminalise covert, deceptive and threatening actions by persons acting on behalf of, or in collaboration with, a foreign principal aiming to influence Australia’s political processes or prejudice our national security,” said the prime minister. This bill also contained tough new espionage, secrecy and sabotage provisions.

The third bill enabled a giant new intelligence, enforcement and policy hub that would be named the Department of Home Affairs. “There is no national-security threat outside wartime that demands an integrated all-of-government capability like this one,” said Turnbull.

One final bill – introduced separately in the Senate – proposed an end to all foreign political donations.

And while the laws were drafted against a global backdrop of Russian interference operations they were clearly designed with the subtlety of Chinese Communist Party tradecraft in mind. “Our relationship with China is far too important to put at risk by failing to clearly set the terms of healthy and sustainable engagement,” said Turnbull.


A global awakening

Since leaving government in June 2017 I’ve been invited to share ideas and observations with scholars and officials in Europe, North America, Asia and Oceania. This period has coincided with President Xi Jinping tightening his grip on power and reinvigorating the party’s old revolutionary machinery. To say there is huge and growing interest in Australia’s experience would be an understatement.

“The Australian exposé reports have inspired the Canadian media to actively report on China’s expanding influence operations in Canada,” says Charles Burton, professor at Brock University and former Canadian diplomat to China. “There are increasing demands from Canada’s security agencies and pressure from public opinion for Canada to initiate legislation modelled on Australia’s.”

When Justin Trudeau became Canada’s prime minister in 2015, he received a government transition document which told him that the “significant and challenging policy contradictions posed by a rising China” should be managed by “informing public opinion about the critical importance of China to Canada’s future prosperity” and “addressing negative opinions hindering Canada’s interests”.

But working to positively guide public opinion has not led to preferential treatment. In December, Trudeau travelled to China to initiate free trade talks and walked away empty handed.

And playing down China’s contradictions has not made them go away.

In May, Trudeau rejected a Chinese takeover bid for Canada’s largest publicly traded construction and infrastructure company, following a public backlash.

In the same month, Canada denied visas to 200 Chinese delegates, including more than 20 officials, who were heading to Vancouver for the Ninth Conference of the World Guangdong Community Federation. The event was organised by the Overseas Chinese Affairs Office, which was recently subsumed within the United Front Work Department.

Across the border, Randy Schriver, the respected US Pentagon official responsible for Asia, told Fairfax’s Peter Hartcher that Australia has “woken up” the world. Schriver’s boss, Jim Mattis, elevated China’s “influence operations” to the same tier of concern as China’s “military modernization” and “predatory economics” in his recent National Defense Strategy summary.

Similarly, up on the Hill, an influential group of senators, including Democrat Elizabeth Warren, has written to key US agency heads to express their “deep concern about growing Chinese influence operations around the world” and to request a “unified” counter strategy. Legislation has been initiated in both the Senate and the House of Representatives, reflecting these concerns.

Human rights advocates are also alarmed. “Beijing now deploys internationally tactics well honed at home: to quietly gut the human rights mechanisms of the UN, to impose restrictions on free speech in classrooms around the world, to undermine labour standards from Africa to Europe,” says Sophie Richardson, the China director for Human Rights Watch.

There is growing support for countering CCP interference across the American political system. But it will struggle to gain support from the top.

Donald Trump campaigned on a crude counter-China platform. He is willing to tip the US and China into a trade war. But his deeply compromised ties to Russia (and possibly others) make it difficult for his advisers to broach the subject of foreign interference at all.


Resetting the terms with China

At first, my exposure to United Front work was all about inducements, with an occasional warning to keep me on my toes. I was offered red envelopes, neatly packed with US$100 bills. And sounded out for a lucrative “consultancy” arrangement with a Hong Kong bank. In one encounter, I was offered air tickets, hotel accommodation, a five-star family holiday, a job, and a gift bag containing bottles of Bordeaux wine valued at up to US$2000 each. These were all reciprocity traps, to be avoided at all costs. Gradually, over time, the ratio of carrots to sticks was inverted.

I soon learned that the United Front system reserved its more vigorous efforts for members of the Chinese-Australian community. Professor Feng Chongyi has been interrogated by Chinese officials who have recounted things he’s said and mentioned people he’s met on Australian university campuses. Most recently, in May last year, Feng was detained in a Guangzhou hotel and interrogated about our friendship. He has contributed greatly to this country, over many years, and the country has not always valued his contribution and protected his basic civil rights.

This is what Australia’s China reset is all about. It’s about sustaining the enormous benefits of engagement while managing the risks.

Australia will succeed in pushing back against authoritarian interference to the extent that we work with the strengths and shore up the vulnerabilities of our open, multicultural, democratic systems. This can only be achieved within a framework of principles that can secure a broad and durable consensus, within countries and between them.

A durable framework needs to be country-agnostic in so far as it is designed to apply to any country’s misbehaviour, whether it be China, Russia or the United States. It needs to recognise diaspora communities as being an essential part of the solution. And it will require a clear conceptual separation between “black” covert operations and “white” activities that play out in the open domain, while recognising that there is a large grey area of ambiguity and plausible deniability that sits in between.

This means welcoming ordinary diplomacy, transparent public diplomacy, and economic activity that does not come with strings attached. And it means supporting parts of civil society that come under outside pressure, on the understanding that sunlight is the best disinfectant. But wherever covert, coercive or corrupting elements are involved – when legitimate and transparent forms of influence cross the line into harmful “interference” – then we need to forcefully respond. “Caution or prudence does not mean adopting a struthious attitude towards harsh realities,” says Singapore’s Bilahari Kausikan. “The ostrich sticks its head in the sand and thinks itself safe.”

John Garnaut

John Garnaut is a consultant to Australian government and private clients. He was previously Fairfax’s China’s correspondent (2007–13) and Asia-Pacific Editor (2014–15), Senior Advisor to Prime Minister Malcolm Turnbull (Nov 2015 – Sept 2016), and Principal Advisor (International) at the Department of the Prime Minister and Cabinet (Oct 2016 – Jun 2017). 

August 2018

From the front page

Dead to us

The Liberal Party should look before it leaps to embrace Peter Dutton

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Remembering Peter Temple

The acclaimed Australian crime writer had a deep appreciation for the folly of things

The death doula

Annie Whitlocke is helping to break the silence around grief and dying

Alt right on the night

One of the extreme right’s greatest harms may turn out to be opportunity cost


In This Issue

Illustration

All the way with Donald J?

Australia cannot stay silent about Trump

‘Less’ by Andrew Sean Greer

The Pulitzer Prize–winning novel is an engaging story of love and literary misadventure

Illustration

Abbott, ANU and the decline of Western civilisation

How the Ramsay Centre’s degree stopped before it started

Hannah Gadsby: ‘Nanette’

Believe the hype about the Tasmanian comedian’s Netflix special


More in The Monthly Essays

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The end of the oceans

The world’s oceans and all marine life are on the brink of total collapse

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The endless reign of Rupert Murdoch

After decades of influence, the media mogul isn’t so much a person as an epoch

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Child protection doesn’t always protect children

When families in the Northern Territory need help, removing children isn’t necessarily the answer

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Hotel Golf

Helen Garner on life, anger and judgement


Read on

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Remembering Peter Temple

The acclaimed Australian crime writer had a deep appreciation for the folly of things

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‘Exquisite Corpse’: reinventing a parlour game in immersive VR

BADFAITH Collective build a Surrealist body at the Melbourne International Film Festival

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Peter Dutton’s leadership ambitions

A reminder of why the minister’s recent dog-whistling should be of concern

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‘Sharp Objects’ blurs the edges

The cruel complexities of women’s lives propel this Amy Adams-led thriller


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