‘Priority target’: The businessman at the top of Australia’s intelligence hit list

On a muggy Fijian morning in December 2021, Fiji’s police commissioner joined a wealthy Suva businessman and China’s ambassador at a “security exchange” symposium in the nation’s capital.

The event would later be heralded by China’s state-controlled press as a step towards strengthening “police exchanges and co-operation between China and Fiji”. But in Australia, security officials were alarmed.

Zhao Fugang (far right) and Qian Bo (second from right), China’s ambassador to Fiji, at a 2021 forum sponsored by Fiji police.

Their concern wasn’t only because the forum was another marker of Beijing’s years-long effort to supplant Australia as Fiji’s key policing partner. It was amplified by the presence of Zhao Fugang: a Suva hotelier and property developer who Australian officials suspect has for years promoted the interests of the Chinese Communist Party in Fiji.

Eighteen months after he was photographed on a law enforcement panel alongside Fiji’s police chief, Zhao’s name was mentioned at another security event in Canberra. Only this time, the event would get no publicity.

Hidden in briefings and reports shared between Australia’s security agencies and their Five Eyes partners was confirmation that for the first time, Australia’s peak criminal intelligence agency had designated a Chinese Communist Party operative – Zhao – as one of the nation’s highest priority investigation targets. Authorities cited not only his “facilitation of Chinese political interests”, but his suspected role in organised crime posing a threat to Australian interests.

Confidential reports created by two federal security agencies and sighted by this masthead allege Zhao is a senior member of a crime network facilitating “large illicit drug shipments” to Australia.

The intelligence files also name Zhao, who denies all wrongdoing and has never been charged with any criminal offence, as a suspected member of an organised criminal syndicate posing a “significant and enduring threat in the region”. The syndicate is alleged to be “highly organised, sophisticated and international in scope” and “alleged to control a large-scale drug shipment and money laundering” enterprise, according to the files.

Zhao’s naming in the reports does not mean he is guilty of a crime, only that he is suspected of involvement in criminal activity. Regardless, it will create headaches for the Fijian government.

‘Serious concerns’

The designation of Zhao as an “Australian Priority Organisation Target” in July 2023 is not only aimed at directing the resources of state and federal agencies towards the Fijian businessman and his networks, but at encouraging action abroad. And it appears to be working. Fiji’s top security official, Home Affairs Minister Pio Tikoduadua, revealed in an interview with 60 Minutes and this masthead that he has been confidentially briefed by Australian officials on what he described as Canberra’s “serious concerns” about Zhao, while stressing the “foreign intelligence” was far from proven guilt.

Tikoduadua said Fiji had been provided with no solid evidence of criminality related to Zhao and that while Fijian law enforcement might “act on something that has been raised with us by foreign intelligence”, the allegation “must have some basis in fact and in law for us to be able to respond to it”.

Separately, the US Treasury Department is considering whether it can subject Zhao to international financial sanctions, Australian officials told this masthead.

But the story of Zhao extends beyond one man. Rather, it starkly embodies the broader contest for influence in the South Pacific, as well as how the region’s police forces have emerged as a key battleground.

The intelligence also provides the clearest example yet of claims senior Australian officials have made privately, and US officials publicly, about China’s use of people like Zhao to advance its foreign policy interests. It’s an accusation disputed by Beijing as conspiratorial “cold war” thinking, with the Chinese embassy in Fiji stressing that China’s work is “transparent, above board and beyond reproach”.

But if Zhao has helped forge relations between Beijing and Suva in plain view, he has become a case study in the argument advanced by Western officials that China can’t be trusted as a security and policing partner in the region. It’s an argument that appears to be resonating in Fiji’s highest office.

Prime Minister Sitiveni Rabuka revealed to this masthead and 60 Minutes​ (as part of a joint-investigation with the Organised Crime and Corruption Reporting Project) his broader concern that China might be somehow supporting the organised criminals behind a surge in large-scale drug trafficking using Fiji as a transit point connecting to the Australian market.

“Would they have any association with those involved?” Rabuka responded when asked if Fiji would seek help from the Chinese authorities to battle organised crime. “I do not want to … open the door to someone that could turn out to be not a friend.”

An energetic entrepreneur, Zhao Fugang migrated to Fiji in 1998 and, according to one of his associates, quickly built a reputation as a man capable of helping Chinese businesses, officials and tourists navigate the Pacific Island nation.

In 2001, he launched a travel company and, in the following two decades, secured Fijian citizenship and built a business empire spanning the Yue Lai Hotel in Suva, a migration agency and a property development business. His restaurant is famous in Suva for its Sunday morning yum cha, where Zhao can often be spotted mixing with Chinese Fijians and local officials.

China’s ambitions

Title records also show that Zhao once held an interest in a piece of land that would ultimately be sold as the site for the tallest building in the South Pacific, the WG Friendship Plaza.

The building’s completion has been delayed for years and it now stands as a symbol of China’s bold but disrupted ambitions in Fiji, which prospered under the regime of Frank Bainimarama, after Australia responded to his 2006 coup with sanctions and Beijing filled the vacuum.

Chinese economic support for Fiji has surged, with concessional loans and other aid funding transport and health projects. But the security high point in the Beijing-Suva relationship was the 2011 signing of a policing memorandum of understanding that led to dozens of Fijian police training in China. China in turn sent Fiji its surveillance technology, equipment and officers to embed with the Fijian police force.

A Western security official who tracks Beijing’s security deals across the region said that given the absence of meaningful military forces in many Pacific Island nations, policing has emerged as a critical area of influence and that the Fiji MOU (the full contents of which were revealed last year by The Washington Post) was a template for more recent Chinese police diplomacy and dealmaking in the region, including in PNG and the Solomons.

But Fiji has also served as a warning to the region about what police power from an authoritarian state looks like. In 2017, an operation involving Chinese authorities flying into Fiji and rendering 77 Chinese nationals accused of cyber scams back to China caused an outcry, given the Fijian legal system was entirely bypassed.

Zhao was also, according to Australian intelligence, key to the “development of Chinese business and political interests in Fiji” during Bainimarama’s reign.

Zhao Fugang in Beijing in 2019 for the People’s Republic of China’s 70th anniversary celebrations.

Open-source material from China’s state-owned news agencies paints Zhao as the point man in Fiji for the Chinese Communist Party’s United Front Work Department, which is dedicated to building influence with foreign politicians, officials and other elites to advance Beijing’s strategic interests.

“He’s really in many ways the frontman for the Chinese state in Fiji,” said Associate Professor Graeme Smith, a China and Pacific specialist at the Australian National University. “There’s no other serious player in town.”

Zhao has variously and openly held key “united front” roles, including as the secretary-general of the Fiji China Council for Promotion of Peaceful National Reunification, and as a member of the first council of the Oceanic Alliance of the Promotion of Peaceful Reunification of China.

The latter was established in December 2016 and chaired by Huang Xiangmo, the billionaire and political donor who was sensationally expelled from Australia in 2019 based on ASIO advice that he was at risk of interfering in Australia’s political system on behalf of Beijing.

Zhao Fugang takes part in a banner-signing event to show support for the Beijing Winter Olympics in 2022.Credit: Getty Images

Zhao has also been appointed an overseas delegate of the Chinese People’s Political Consultative Conference, a key CCP advisory body.

In 2019, at a CPPCC event to celebrate the 70th anniversary of the founding of the People’s Republic of China, Zhao was quoted in a Communist Party news organ as saying: “In Fiji in the South Pacific Islands, my heart beats with the pulse of the motherland! I love you, China!”

Beyond the patriotic posturing, it is Zhao’s ability to rub shoulders with Fiji’s most powerful figures that has earned him a reputation in Suva and beyond as a wealthy businessman capable of seeking and wielding influence.

Fijian Prime Minister Sitiveni Rabuka (second from left), Wang Xuguang from China’s embassy in Fiji (centre) and Zhao Fugang (far right).

According to two senior Australian officials and one high-ranking Fijian public servant, Zhao had a “direct line” to Bainimarama during the latter’s reign as prime minister between 2007 and 2022.

Bainimarama could not be reached for comment. Zhao appeared dismissive of the suggestion he had enjoyed special access to the now-former prime minister when he was briefly quizzed at his hotel by this masthead, saying “everyone knows Frank”. He implied his relationship arose only from Bainimarama dining at the Yue Lai restaurant.

But in Chinese language news outlets, including the CCP-controlled Ta Kung Pao, Zhao was variously described as an “adviser” or “special economic adviser” to Bainimarama.

With Zhao’s help, China “got in very, very deep and very, very close” to Bainimarama’s government, the ANU’s Graeme Smith said.

Reporter Nick McKenzie with Zhao Fugang.Credit: 60 Minutes

Reporting in state-controlled outlets suggests Zhao also played a key role promoting China’s security interests in Fiji. In 2016, company registry documents show that Zhao set up at his hotel an official Overseas Chinese Service Centre. Beijing has denied claims from Western governments and researchers that some of these centres are part of a global network of offices engaged in “united front work” and, in some cases, help monitor Chinese citizens.

Rubbing shoulders

As head of the centre, Zhao attended and hosted several high-level meetings on security co-operation.

They include a March 2017 meeting with Fijian Defence Minister Ratu Inoke Kubuabola to complain about crime affecting Chinese residents. Zhao sought assistance from a special police taskforce or Fiji’s military, securing a promise from Kubuabola of increased police interaction with Zhao’s centre to “discuss solutions”.

In January 2021, Zhao was a speaker at a public security forum co-organised by the Chinese embassy and attended by senior Fijian policing officials. Twelve months later, Zhao was a key figure at another Fiji Police and Chinese Community Exchange Forum on Public Security, sitting on a panel with the Chinese ambassador and the then Fijian police commissioner, Sitiveni Qiliho.

The same year, the Australian Federal Police’s liaison officer in Suva sent an intelligence briefing to Canberra describing suspicions that Zhao may be part of an organised crime group whose senior members had a “demonstrated ability to co-ordinate their operations in the region”.

The cable identified one of Zhao’s suspected key associates as a Chinese-Fijian businessman convicted of drug trafficking in 2004 who is the business partner of a senior Fijian politician.

When confronted by this masthead at his hotel about his alleged links to organised crime, Zhao denied the claims and told reporters to contact the Fijian police force to vouch for him. Twenty-four hours later, a Fijian officer called this masthead to follow up on a complaint lodged by Zhao.

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According to former and serving officials, the decision of Australian agencies to investigate Zhao and his network via his designation as an “Australian Priority Organisation Target” in July 2023 points to an escalation of Canberra’s efforts to disrupt China’s levers of influence in the region as it seeks to exert its own.

“In layman’s terms, it means it’s [putting Zhao at] the top of the top of targets in this country,” said former AFP intelligence officer John Coyne, who is now a senior analyst for the Australian Strategic Policy Institute. Previous Australian Priority Organisation Targets have been international bikie bosses or Middle Eastern money launderers.

John Coyne, a former AFP intelligence officer and now a senior analyst with the Australian Strategic Policy Institute.Credit: Alex Ellinghausen

Coyne said the significance of the priority target listing lay in Zhao’s dual role – as an influential figure advancing the interests of the Chinese Communist Party in Fiji and someone suspected of having links to organised crime in the Pacific.

Such a listing, he said, “to my knowledge has not occurred before”.

“It is all about China,” said a serving official, in a comment repeated by a senior Albanese government minister who sits on the cabinet’s national security committee.

Australian intelligence reports seen by this masthead describe suspicions that Zhao has been connected to international drug trafficking networks targeting Australia since at least 2004.

One intelligence report circulated among federal agencies alleges that Zhao “exploits his favourable position within the Fijian community to benefit his criminal network” and that the network has been “associated with a range of criminal activities impacting Australia including large illicit drug shipments, money laundering, migration fraud and human trafficking”.

The report outlines suspicions that Zhao is involved with a regional crime network that “seeks to influence the environment to provide cover for Chinese organised crime” and that he is “well connected to other Chinese organised crime leaders in the Pacific”.

His network is suspected of being “involved in ... providing a Fijian ‘safe hub’ for drug shipments, on behalf of South American cartels and [other Australian Priority Organisation Targets]”.

Coyne said the designation of Zhao as a priority target is the strongest suggestion yet that Australian security agencies believe that China is using figures allegedly involved in serious transnational organised crime as part of its strategy to gain influence.

Security probes

This is not the first time police or Australian spies have investigated Chinese Communist Party-linked figures for involvement in serious organised crime. In 2018, the Australian Criminal Intelligence Commission intensively probed a Macau businessman called Alvin Chau over allegations he was “facilitating large-scale money laundering between Australian and China”. Chau, like Zhao, was a representative on one of the CCP’s key united front bodies.

In 2018, the Australian Criminal Intelligence Commission intensively investigated Macau businessman Alvin Chau.Credit: Bloomberg

Chau was also suspected to answer to a notorious triad leader nicknamed “Broken Tooth”, whom the Chinese government has reportedly relied on to advance its interests elsewhere in the Pacific.

In 2019, ASIO and Victoria Police gathered intelligence on another key CCP United Front figure in Melbourne, Tom Zhou, for organised crime activity and for foreign interference activities, including his dealings with a staffer in the Victorian government. Tom Zhou was backed by the Chinese consulate in Melbourne as a united front leader, despite being wanted in China for serious crimes. He also plotted to bribe Vanuatu’s Prime Minister, Charlot Salwai, to win a casino licence there, although no money was ever paid. Both Chau and Tom Zhou were arrested by Chinese authorities after their activities were exposed in Australian reporting.

Speaking generally, experts have claimed that China has a track record in using “patriotic” organised crime figures as proxies abroad, particularly when part of the job is to influence local elites.

“You need fixers. You need people who know people. And often criminals have a really good Rolodex,” ANU’s Smith said, speaking in general terms.

“If you can find people that are successful business people and involved in criminal activities, then they’re often your most effective vectors in-country because they know people and they’re willing to do the stuff that the state doesn’t want to do.”

Last year, on the sidelines of a Melbourne meeting with AFP chief Reece Kershaw, FBI deputy director Paul Abbate said he had “no doubt” the Chinese state was still using organised crime groups as agents of influence in Pacific Island nations. Abbate was speaking generally and did not name individuals.

“They’re [the Chinese government] leveraging these [criminal] groups to undermine, again, our democracy,” Abbate said.

Kershaw refused to comment on the FBI deputy chief’s claims, but said a $300 million funding package from the Albanese government would help the AFP counter “any organised crime group that’s actually eroding away democracy and the economies of the Pacific”.

Fijian Prime Minister Sitiveni Rabuka and Prime Minister Anthony Albanese in Canberra in October.Credit: Alex Ellinghausen

Last week, Kershaw was in China to sign off on agreements the AFP has with Beijing to share information about transnational drug trafficking. The AFP and the Australian Criminal Intelligence Commission refused to comment on this story. But government sources have confirmed the AFP is pushing for additional funding to ensure Canberra, and not China or its proxies, is the first port of call for Pacific Island nations seeking police training, equipment or other resources.

Fiji is eager for outside help, but it is also keeping its options open. While Prime Minister Sitiveni Rabuka said he was far more comfortable partnering with Australia than China when it comes to police and other security support, his home affairs minister, Pio Tikoduadua, defended his recent decision to re-enliven Suva’s “extensive” police partnership with Beijing on the basis that it is as “extensive as the one that we have with Australia”.

Even if the investigation produces no charges, or was dismissed as politicised, John Coyne, the former AFP intelligence officer, said the targeting of the Yue Lai hotel owner by Australian authorities would be a blow to Beijing.

“If the allegations are correct, then it will have a significant impact on their influence operations in the region.”

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