China’s Influence Game Down Under.

14 Nov, 2017

By Charles Edel, Published in The American Interest on 13 November 2017

China’s sophisticated infiltration of Australian politics is a troubling example of how authoritarian states can subvert open societies. The United States should heed the lesson.

Tragedy hovered over the birth of the American Republic. But that tragedy was not defined mainly by the carnage of the American Revolution, which resulted in the death of more than one percent of the population. Rather, for the American statesmen who came together to draft the Declaration of Independence in 1776, and met a dozen years later to design the Constitution, the life and death of the republics of antiquity preoccupied their thoughts. Steeped in the history of Greece and Rome, the Founders realized that the odds of creating and maintaining a self-governing republic in the face of hostile autocratic states were stacked against them. Nowhere was this danger greater than in the threat foreign interference posed to political independence.

America’s founding generation obsessed over this danger. During the debates at the Constitutional Convention, John Jay made the case in The Federalist (No. 2) that the “dangers from foreign force and influence” could exacerbate the country’s internal divisions and leave it distracted, weakened, and vulnerable. These fears materialized in the 1793 Genêt Affair, when France’s Ambassador to the United States sought to interfere in American politics on behalf of France. Thomas Jefferson, Washington’s Secretary of State, charged that such blatant interference in America’s democracy was “hazardous to us” and its implications were “humiliating and pernicious.” He demanded that the French immediately recall their ambassador. John Quincy Adams warned his fellow citizens that “of all the dangers which encompass the liberties of a republican State, the intrusion of a foreign influence into the administration of their affairs, is the most alarming, and requires the opposition of the severest caution.”

In the aftermath of U.S. special counsel Robert Mueller’s indictments of several Trump campaign officials on charges of conspiracy, the problem of foreign interference in our democracy now hangs over the White House.

Russia is not the only country seeking to shape the choices of democratic societies. A different, subtler, more sophisticated, and potentially long-ranging effort is being waged by Xi Jinping’s China.

Because Washington is riveted by the unfolding Russian drama, because most of Beijing’s efforts fly under the radar, and because Beijing has repeatedly claimed that its state-directed activities are solely the exercise of soft power, many Americans have missed China’s attempts to influence, shape, and suborn democratic decision-making. But a look at the debates currently roiling the Australian political, educational, and business communities offers some notable insights into Beijing’s influence efforts. It also previews likely challenges ahead for American policymakers.

Over the past several months, the Australian media and government have sought to analyze Chinese influence across Australian society. The resulting reports, which began appearing in print and on television in early June, revealed that Beijing was monitoring and directing Chinese student groups in Australia, had threatened Australian-based Chinese dissidents and their families, was attempting to silence academic discourse in Australia deemed offensive to China, and was seeking control of all Chinese-language media in Australia. This came on the heels of revelations that individuals in Australia with links to the Chinese Communist Party had made major political donations to Australian politicians. The sum of these actions has prompted an intensifying debate among Australia’s national security community and politicians.

The Australian intelligence services have long known about the risks posed by Chinese influence, but the matter is now attracting significant public scrutiny. In late May, Duncan Lewis, the head of ASIO (the Australian equivalent of the FBI), warned Parliament that foreign influence efforts in Australia were occurring at an “unprecedented scale.” The implications to Australian democracy, he noted, were potentially extreme, as such interference “has the potential to cause serious harm to the nation’s sovereignty, the integrity of our political system, our national security capabilities, our economy and other interests.” And while Australian Prime Minister Malcolm Turnbull did not cite China by name in early June, he amplified this concern by noting that Australian “interests are also directly threatened by attempts by foreign states to compromise the integrity of our democratic institutions and processes.” Discussing Russian influence operations and cyber disinformation campaigns in the American election, and noting that similar threats could compromise the integrity of Australia’s “democratic institutions and processes,” Turnbull called for a revamping of the legal framework governing political donations and disclosures.

Unlike America, which requires individuals acting on behalf of foreign governments to register their activities, and which theoretically bans political campaign contributions from foreign sources, Australian law has no such provisions. As revealed in an Australian television investigative special this summer, this loophole allowed for several prominent Australian-Chinese businessmen with ties to the Chinese government to make substantial contributions to Australian politicians. In some instances, these appeared tied to a quid pro quo of support for Chinese government positions. Prompted by growing concerns of Chinese influence in its electoral system, the Australian government is now drafting legislation in an effort to address these gaps. Expected in early 2018, the new laws are likely to tighten campaign finance rules, require the registration of foreign agents, further define espionage, and provide a more effective legal framework to combat foreign interference.

On Australian campuses, too, a vigorous debate has been occurring over the nature of Chinese influence. Journalists have reported instances of Chinese agents monitoring Chinese students in Australia and threatening their families in China when they voice opinions contrary to Beijing’s. In Sydney and elsewhere, an uptick in protesters disrupting lecturers deemed offensive to Chinese sensibilities is a sign of the times; and concern is growing that universities, eager for donations, investments, and fees generated from foreign students paying significantly higher tuition, might not defend their institutional values as forcefully as they otherwise might. Australian politicians now acknowledge that this type of activity poses a threat to free and open societies, since free speech serves as the basis of liberal education, and is more broadly the cornerstone of democratic debate.

In early October, the Secretary of Australia’s Foreign Ministry spoke bluntly of “untoward influence and interference” at Australian universities. Speaking at the University of Adelaide’s Confucius Institute, a Chinese-government-funded academic institution, Frances Adamson, who formerly served as Australia’s Ambassador to China, warned, “The silencing of anyone in our society — from students to lecturers to politicians — is an affront to our values.” Julie Bishop, Australia’s Foreign Minister, echoed this point recently, stating that Australia will not tolerate “freedom of speech curbed in any way involving foreign students or foreign academics.” Penny Wong, the Labor shadow Foreign Minister, made a similar point declaring that “we would not want any group to seek to silence another in the contest of … ideas.”

Along similar lines, Australia’s Chinese-language media now largely speaks with one voice. A major report in 2016 documented that the Chinese Communist Party exerts significant influence over Chinese-language media in Australia. The report cautioned that “the notion that the Chinese-language media in Australia has been ‘taken over’,” was too simplistic. However, leading Australian Sinologist John Fitzgerald has noted that the “extensive reach of the Chinese party-state silences and intimidates alternative voices and commentaries” in Australia.

Attempting to govern the debate in Australia among the Chinese-speaking community, Beijing also appears to be trying to control the flow of advertising dollars to independent Chinese-language newspapers.

Although some of these issues resonate in the Australian business community, the debate there has been quieter. China may be a near-peer economic competitor of the United States, but it looms much larger for the smaller, export- and capital-dependent Australian economy. The relative size of U.S. and Australian trade flows with China bears the point out. About 31 percent of Australian exports go to China, which is by far Australia’s largest export market, whereas China is the United States’ third largest export market, and the destination for 8 percent of U.S. exports. The common narrative in Australia is that it got through the financial crisis of 2008 without a recession because of Australia’s close trade relationship with China. This narrative is only partially correct, since Australia’s massive exports to China rest in no small part on the industrial and technical capacity built up by decades of foreign investment, especially from the United States, whose investments in the country are more than five times greater than China’s. But even with this important qualification, the different sizes of the U.S. and Australian economies and the relative share of each country’s exports to China shape very different mindsets among the business communities in the two countries.

In the United States, there has long been discussion of unfair Chinese trade practices, state-sponsored cyber attacks on American companies, and the theft of intellectual property. In Australia, the broad contours of the debate are different, primarily because most of the country’s trade commodities—iron ore, coal, and tourism—are less hackable. While the debate has intensified around access to and vulnerabilities of Australia’s critical infrastructure, and there is considerable public opposition to foreign ownership in the agricultural sector, the business community has not yet been convinced that the risks outweigh the opportunities.

But even here, the debate is slowly changing as a growing number of business leaders in Australia acknowledge the challenges of dealing with a command economy practicing mercantile policies. James Packer, the Australian casino magnate who has expanded his businesses into Macau and Hong Kong, previously advocated for Australia to start offering its Chinese friends a better return on investment. But after his employees were jailed by Chinese authorities in 2016, and he took a considerable financial hit, Packer became acutely aware of the risks of doing business in China.

Absent rule of law, secure property rights, and any guarantees of procedural fairness in China, the Australian business community increasingly recognizes that little will safeguard their investments. Multinational companies have learned the hazards accompanying demands for access to proprietary commercial information, with large-scale thefts of intellectual property that negate investments in research and development. Australian businesses are now learning similar lessons, but the China debate in the Australian business sector is probably five years behind the same debate in the United States.

While Australia has lately begun paying more attention to Chinese actions in the political, academic, media, and business spheres, the breadth of these activities is only starting to become clear. Behind most of these activities is a Chinese state-directed campaign to build support for Beijing’s larger political agenda. Referred to as “influence operations” and “political warfare” in an earlier era, such efforts combine overt and covert methods to create an environment in foreign capitals that is politically and socially conducive to Chinese interests. Professor Anne-Marie Brady, of the University of Canterbury in Christchurch, New Zealand, has documented these efforts in an extraordinarily thorough report tracking China’s political influence activities under Xi Jinping. Brady examines the attempts of the United Front Work Department of the Chinese Communist Party to “guide, buy, or coerce political influence abroad.” While most of her research focuses on activities in New Zealand, it is broadly applicable to liberal democracies around the world.

Coincidentally, the Austrian political philosopher Karl Popper published The Open Society and Its Enemies at the very same university in New Zealand some seventy years ago. Having fled the Nazis for New Zealand, Popper argued that history could be understood as a drawn-out battle between proponents of open, dynamic societies and authoritarians preferring closed societies, with citizens “who obey, who believe, and who respond to [their] influence.” According to Popper, it would always be in the interest of the authoritarians to try to influence the affairs of open societies to further their own agenda. Popper cautioned that the enemies of open society were powerful and numerous, while liberal democracies were rare, fragile, and required extreme vigilance to maintain.

In this instance, it is necessary to emphasize that criticism of the Chinese Communist Party’s activities is not, and never should be, equated with criticism of people of Chinese ethnicity. As Rory Medcalf, Head of the National Security College at the Australian National University observed in September, failing to address this issue relegates Australian citizens of Chinese descent to a second-class status, and dismisses the protection of their rights as less important than stable relations with the Communist Party that runs China. An open society welcomes, and indeed encourages, the integration of talented individuals from all backgrounds.

An open and free society will always be vulnerable to external influences. America’s Founders recognized this reality, and sought to build protections against foreign interference. When Citizen Genêt attempted to meddle in America’s sovereign democratic processes, it was Alexander Hamilton who suggested sunshine as the best disinfectant. In a cabinet meeting of the President’s advisors, Hamilton strongly urged that the government lay “the whole proceedings” with “proper explanations” before the American people in order to prevent Genêt and his American sympathizers from undermining the country’s confidence in Washington’s administration.

Hamilton understood that transparency and open debate were critical to preserving the sovereignty of the American Republic in the face of foreign interference. More than two hundred years later, confronted by Russian and Chinese influence efforts, Australia and the United State are re-learning the lesson that open societies demand vigilance and require defenders. The first step is recognizing the threat posed by authoritarian states seeking to influence free societies. Governments must also inoculate the public to these threats by conducting public education campaigns to ensure broader understanding. Fundamentally, without a more robust defense of liberal values, open societies could find their core national interests of sovereignty, freedom of expression, and the free flow of ideas, goods, and people irreparably damaged. As the American Founders understood, the preservation of national interests requires the unceasing defense of liberal values.

Charles Edel is a Senior Fellow & Visiting Scholar at the University of Sydney’s U.S. Studies Centre, and author of a forthcoming USSC report on the American presidency. Previously, he served as Associate Professor of Strategy & Policy at the U.S. Naval War College.