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15 July 2020

With Jonathan Pearlman

Spy vs Spy

On 23 August 2018, the Turnbull government released a media statement that revealed Canberra would not allow Chinese telecommunications firm Huawei to participate in Australia’s 5G mobile network. It mentioned neither Huawei nor China, but stated that any firm “likely to be subject to extrajudicial directions from a foreign government” would not be involved with 5G. This was a strangely opaque way for the government to announce a far-reaching foreign policy decision, especially one it knew would damage Australia’s relations with its largest trading partner. The government made little attempt to explain its position or to enable serious debate, and the statement, released hours before Turnbull was deposed, was inevitably buried by that week’s political drama.

Unfortunately, in the two years since, little has changed in the way of government transparency. Intelligence agencies play an increasingly important role in determining Australia’s approach to China, but their activities are conducted covertly. And so, crucial decisions that shape Australia’s relationship with China are often shrouded in secrecy.

The government’s opacity in dealing with China was again evident last month, when Scott Morrison announced at a press conference that serious cyberattacks had been made against Australia. He said a state actor was believed to be responsible but refused to name a culprit. The same tendency could be seen in the government’s ineptly handled proposal for an inquiry into the origins of COVID-19 in April, which appeared designed to expose China’s role in covering up the pandemic’s outbreak. And it was on display in March, when the government announced it would be screening all foreign investment, but insisted that China was not its main target.

This growing record of poorly delivered and inadequately explained policy announcements highlights the challenges faced by Australia in this new era of intelligence. As Andrew Davies explains in the latest issue of the AFA journal, Australia has entered a third phase of post–World War II espionage. The Cold War phase was dominated by state-on-state espionage and the terrorism phase focused on elusive non-state actors. This new phase combines the terror threat with a return to state-on-state espionage, often involving China.

The unusual feature of this era is that Australia’s intelligence agencies are focused on a state target that is not an explicit enemy of the nation, as the Soviet Union was during the Cold War. Menzies denounced Soviet-era communism as a “religion of hatred” that threatened to overturn Australia’s democracy. In contrast, Morrison describes Australia’s relationship with China as “a mutually beneficial partnership”. “We are a liberal democracy,” he said in November. “They are a Communist Party state. We are not seeking to adopt their system and they are not seeking to adopt ours.”

Morrison is right not to label Beijing as a rival, as the White House has recently done. But intelligence agencies believe that China poses a serious – and potentially existential – threat to Australia, through its use of such tactics as foreign interference, hacking and the deployment of sleeper cells and other locally based spies. As a result, Australia’s approach to China is two-faced: it publicly embraces China as a “comprehensive strategic partner” and in the shadows wages a campaign to keep it at a distance.

But this approach is not helping to improve ties with China and it leaves the Australian public confused and sceptical about its own government’s intentions.

Danielle Cave explores this dilemma in another essay in the new issue of AFA. She urges Canberra to explain and justify its intelligence decisions, particularly those involving cyber and technology issues. Her diagnosis is worth quoting at length. It should be the working guide for Australian politicians as they grapple with the challenges of this third phase of espionage:

In Australia, we have repeatedly failed to have public conversations about our complicated relationship with China. Our largest trading partner is also our largest intelligence adversary. This is inconvenient, and the consequences can, at times, be messy. It presents challenges that will continue to impact on national security and parts of the economy. It raises concerns about issues such as data privacy and academic freedom, and places groups like Chinese-language media, civil society and diaspora communities at risk from foreign interference and coercion. But the complexities of this relationship won’t change anytime soon. Our political leaders need to learn how to talk about it.


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As China grows more aggressive, Australia needs to turn its attention to our vulnerable neighbours

“With the United States out to lunch in the Pacific, Australia now needs its alliances in South-East Asia and the Pacific more than ever, and for those alliances to mean something material. This is part of considering our future not just beyond the coronavirus, but outside the prism of the US–China relationship.” Laura Tingle, ABC News

A diplomatic step-up to match our military step-up

“While the past two decades have seen large growth in the budgets areas of other parts of our national security apparatus, from Defence to the intelligence agencies and Home Affairs, our diplomatic budget has remained static.” Dave Sharma, The Interpreter (Lowy Institute)

China’s superpower dreams are running out of money

“How is it possible that a self-described developing country like China can finance a superpower rivalry with the United States? ... The simple answer is it can’t.” Salvatore Babones, Foreign Policy [$]

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Singapore government in denial

“The People’s Action Party (PAP) government of Singapore has suffered its worst ever election result, but Prime Minister Lee Hsien Loong has suggested merely that the result was ‘not as strong an endorsement as hoped’ … The most sobering lesson for Prime Minister Lee and his inner circle is that the next generation of leaders … has failed to cut through to the electorate, and does not seem up to the job of government.” Michael Barr, East Asia Forum

Papua New Guinea sides with China on Hong Kong

“Papua New Guinea’s vote in the Human Rights Council is a sad reflection of the state of foreign policy in our closest neighbour. Instead of pursuing an independent policy, also provided for in the constitution, PNG is increasingly aligning itself with the People’s Republic of China when it counts.” Jeffrey WallThe Strategist (ASPI)

Free from Australian Foreign Affairs

Mission impossible – spying in the age of Xi and Zoom

“An intelligence analyst at her desk today, worrying about the accuracy of COVID-19 data from China, the origins of a persistent cyberattack or the machinations of a terrorist group with undercover cells in half a dozen countries, probably doesn’t spend a lot of time reflecting on how much easier her job would have been thirty years ago. But recent developments in geopolitics and technology, as well as a continuing terrorism threat, have been complicating the lives of Australia’s intelligence community.” Andrew Davies, HERE

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