Political donations highlight growing concerns over Chinese influence in Australia

SEPTEMBER 9, 20167:31PM

Prime Minister Malcolm Turnbull and Chinese President Xi Jinping at the G20 Leaders Summit. Picture: Lyndon Mechielsen

Charis Changnews.com.au@CharisChang2

FOR years now, Australia has enjoyed the financial benefits of its relationship with China.

But as China’s power grows, there are increasing concerns about its growing interest in Australia’s land, infrastructure and politics.

Recent controversy over Chinese money being used to pay the bills of Labor Senator Sam Dastyari has focused attention on what China might be expecting in return.

When it comes to political donations, the $1670 bill Mr Dastyari asked a Chinese company to cover, is just the tip of the iceberg.

Last month, the ABC reported businesses with Chinese connections gave Australia’s major parties more than $5.5 million between 2013 and 2015, making them the largest source of foreign-linked donations.

The donations were troubling enough for the head of Australia’s spy agency to personally brief leaders of Australia’s major political parties last year about the national security risks.

According to the ABC, the security warning from the Australian Security Intelligence Organisation (ASIO) director-general Duncan Lewis included naming donors his agency thought were acting on behalf of the Chinese government.

The briefing was seen as another indicator of growing concern in intelligence agencies about China’s use of “soft power” in Australia.

Two other developments that reportedly caught the attention of intelligence agencies were the potential sale of the Kidman cattle empire to Chinese-owned Dakang Australia, and the 99-year lease of NSW electricity distributor Ausgrid to Chinese and Hong Kong interests.

Both of these bids were ultimately blocked by the Australian government, with reports that national security agencies were “unanimous and unequivocal” in rejecting them, while noting the decision was “not country-specific”.

Treasurer Scott Morrison has said that both bids were “contrary to the national interest”, but has not explained how.

The ABC also revealed this year that hackers based in China were suspected of attacking sensitive Australian Government and corporate computer networks over the past five years.

Chinese youths surf the net at a cyber cafe in Shanghai. Picture: Kevin Lee/Bloomberg NewsSource:Supplied

Michelle Price, senior adviser for cyber security at the National Security College at ANU, confirmed to news.com.au there were concerns among intelligence agencies about China’s influence, but this had to be put into context.

“There are a whole range of different countries actively pursuing their interests in the world as they always have done, Australia is one of those too,” she said.

“Nowadays relationships between countries are very dynamic and complex ... it’s not just about military relations, but also about trade, cultural exchange and increasingly about things like tourism.

“China is pursing its interests in a way it thinks will achieve its outcomes, sometimes it jars with what we find acceptable, and at other times it is acceptable.”

As China’s influence across the region grows, there’s growing concern about what its end game is, and whether Australia should be rethinking how it deals with the rising power.

GROWING FEARS

Despite concerns that China is buying up agricultural land in Australia, a new register released this week showed that Chinese interests control less than half a per cent of agricultural real estate, well behind the British, who are the biggest foreign owners.

While this has calmed some fears, evidence of Chinese influence or “soft power” has been popping up in other areas, including the increasing promotion of pro-Chinese government views in Australia.

Today, a think-tank led by former NSW Premier Bob Carr was accused of operating as a “propaganda arm” of the Chinese communist government.

A prominent Australian China academic who did not want to be named toldThe Australianthe Australia China Relations Institute at UTS, which was established with a $1.8 million donation from a Chinese property developer, was “too close” to the Chinese ­embassy.

And while many Chinese living in Australia are critical of the Chinese government, there are signs some community groups are being urged to promote pro-government views.

This year the ACT Federation of the Chinese Associations wrote to the Prime Minister about the country’s position on the South China Sea.

“It hurts the feelings of the vast number of Chinese Australians to see Australia itself on the verge of contributing to the destabilisation of the sensitive South China Sea region,” the letter reportedly said.

This month there were memorial concerts in Sydney and Melbourne scheduled to mark the 40th anniversary of the death of communist leader Chairman Mao Zedong, but these were cancelled after protests.

Some suggest the goal is to promote China’s push for control of the South China Sea, and to get Australia to rethink its alliance with the United States.

Professor Rory Medcalf, who is head of the National Security College at ANU, has suggested that six-figure Chinese donations to political parties could hardly be “gestures of admiration for our electoral system”.

A tourist takes a selfie in front of a giant portrait of Mao Zedong at the gate of the Forbidden City in Beijing on September 6. Picture: Fred Dufour/AFPSource:AFP

“Beijing wants to neutralise Canberra’s opposition to Chinese strategic moves in Asia,” Prof Medcalf wrote in an opinion piece.

“China seeks to weaken our vital security alliance with the United States and dissuade Australia from offering even moral support to Asian countries, such as Japan, when their interests clash with China’s.”

Even if the motivations were not that sinister, Prof Medcalf says the donations weaken Australia’s credibility in Asia. He said the controversy over Mr Dastyari’s actions provided a “rare opportunity” for reform of foreign funding of political parties.

“Australia stands out as one of the few countries in the Asia-Pacific — or among developed democracies worldwide — that allow significant foreign funding of political parties.”

SHOULD WE BE CONCERNED?

While Chinese investment in agricultural land in Australia is not significant, we are still the second largest recipient of Chinese direct investment in the world after the US across the past 10 years, Emeritus Professor of strategic students at ANU, Paul Dibb wrote in an opinion piece for The Australian recently.

Prof Dibb said the very different values of China and Australia make it difficult to treat China like other investors.

“The fact China is a one-party communist state, lacks freedom of the press and independence of the judiciary, and has a dreadful human rights record cannot be swept under the carpet,” he said.

Professor James Laurenceson agreed that Australia’s relationship with China would always be a challenging one.

“We have different cultures, history, values and political system so managing this relationship will always be harder than say with the US,” he told news.com.au.

“That said, I think we are doing well overall.”

Prof Laurenceson, who is deputy director of the criticised Australia-China Relations Institute at UTS, said Australia’s choices haven’t always made either side happy.

He said China had been unimpressed with Australia’s response to the South China Sea dispute, while the US asked Australia not to join the Asian Infrastructure Investment Bank, which we did anyway.

“We will not always follow the US and we will not always follow China and that’s what we want,” he said.

But Prof Laurenceson did agree with recent comments from former prime minister Paul Keating during an institute event this week, that Australia needed a new foreign policy.

“We are not as focused on long-term strategic shifts as we ought to be,” Prof Laurenceson said.

Prime Minister Malcolm Turnbull and Chinese President Xi Jinping at the G20 Leaders Summit. Picture: Lyndon Mechielsen/News Corp.Source:News Corp Australia

Mr Keating, who now sits on an advisory council for the China Development Bank that funds infrastructure in growing Chinese cities, said US dominance in the region would not last indefinitely.

“We need to recognise that and not line up with the US on every decision, and accept that the US role will have to change,” he said.

DOES AUSTRALIA NEED TO CHANGE?

But Ms Price, from ANU, disagrees about the need for a new foreign policy and believes that the Australian government should continue doing what it’s doing.

“Australia for a long time has had a reasonably mature approach to China,” Ms Price said.

“We seek views from a wide range of sources. The US would feature largely in that and it does but we do make up our own mind.”

While she thought the Australian government already took a holistic view of its relationship with China, it could do more to encourage conversations between state governments, and between state and federal agencies.

“We can always do better at sharing information and having strategic conversations,” she said.

Another way forward, according to Prof Laurenceson, could involve creating a “negative list” that would identify assets that Australia is not comfortable with foreign investors owning.

These could include roads, railways, bridges, gas pipelines, airports, maritime ports, electricity assets and telecommunications.

“There are some assets around which there are genuine security issues,” Prof Laurenceson said.

But the list would apply to all countries equally, not just China, and wouldn’t be seen as discriminatory.

Contrary to some people’s views, he said he did not think China was the “big, bad player” in the region.

“The legitimacy of the Chinese government relies on delivering rising living standards at home,” he said, adding that income per person in China was still only 15 per cent of that in the US.

“China still has a long way to go, so they don’t have a great incentive to rock the boat and turn the world order on its head. They are looking at incremental change, not to overthrow the existing global system.”

Ultimately, Prof Laurenceson said he believed China wanted respect and recognition in line with its size in the region.

“It is under-represented in the World Bank and the International Monetary Fund and it wants to be recognised as the serious player that it is. I don’t interpret that as a specific threat to Australia,” he said.

Mr Keating has suggested Australia’s influence in the region is waning and it should join ASEAN, to try and find the country’s security in Asia, rather than from Asia.

“One place Australia does not want to be is having put all of the chips on the United States, to find the United States withdrawing from the region,” he said.

“I don’t think the United States is going to withdraw from the region; I think its role in the region has to change, but a wise country, and I’d like to think Australia is a wise country, will at least hedge its bet on the possibility.”