Countering United Front’s meddling, spying and theft

Launching an overhaul of foreign investment screening, Scott Morrison said geopolitics meant deals could not rest on commercial aspects alone. Instead, they would also be judged on strategic and national security issues. From next year, all foreign proposals relating to sensitive businesses — telecommunications, critical infrastructure, defence supply chain, cyber-related technology, businesses that collect, store and own data, aspects of energy, electricity, ports and water — will go before the Foreign Investment Review Board. The buck stops with the Treasurer, who will be able to “call in” an investment — before, during or after acquisition — for a security review. “Investment in Australia must be on our terms, on our rules and in our interests,” the Prime Minister said, invoking sovereignty, the pandemic’s critical institutional bequest. Yet this is not a kneejerk response in a crisis but the result of China Inc’s pathologies.

Beijing’s use of financial muscle and political warfare to expose weak points in our open society is driving change. As security analyst Alan Dupont has noted, under President Xi Jinping, China’s “expanding toolkit” includes propaganda, “wolf warrior” diplomacy, disinformation, media manipulation, subversion, financial traps, intellectual property theft, coercion and the use of economic and military pressure for strategic purposes. “Xi has elevated interference and influence operations into an art form,” Dupont argued in our pages. The Chinese Communist Party’s tactics have forced responses, including foreign interference and espionage laws, the banning of Huawei from the new 5G network and curbs on foreign donations to political parties. ASIO director-general Mike Burgess believes the level of threat from espionage and interference is unprecedented. “It is higher now than it was at the height of the Cold War,” he said in February.

Now, a new research paper by the Australian Strategic Policy Institute documents the CCP’s United Front system to influence politicians, meddle in Chinese communities and transfer technologies from abroad. ASPI’s Alex Joske details how the model, which has been used in China to quash civil society and independent voices, is being exported to foreign political parties, diaspora communities, universities and multinational corporations. The system undermines social cohesion, fuels racial tension, influences politics, harms media integrity, facilitates espionage and increases unsupervised technology transfer. As we have reported in recent weeks, the vast network operates here in various guises, with groups involved in technology transfer, talent recruitment and facilitating deals.

ASPI’s report is a reality check, detailing how China’s intelligence agencies, universities, state-owned media, state-owned enterprises, private companies and foreign affairs agencies are part of a disruptive system. If we are to counteract the CCP’s onslaught, we need to understand its structures, agencies, methods and effects. It won’t be easy to get a clear view, for example, given how deeply enmeshed research institutes are with China’s in key fields, including computing, marine science and medicine. We are dealing with an authoritarian, opaque regime, playing by its own rules. When we assert our interests, as in investment screening, there will be retaliation, such as tariffs on our products and travel warnings against visiting Australia, and lost opportunities. According to a report by KPMG and the University of Sydney, Chinese investment in Australia fell by more than 60 per cent last year, despite a record level of bilateral trade. We know doing business with China Inc can be mutually beneficial. But we must also become resilient to punishment in standing up for principles and values.