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Federal Politics

09 Nov 2017

Maintaining commercial ties with China

In dealing with an authoritarian foreign power like China, Australia needs to balance commercial interests with both our national security and democratic ethos.

Obviously, we value Chinese-Australians and investment from China, now our biggest trading partner.

A recent report by the Kissinger Institute says: “In June 2017 the New York Times and The Economist featured stories on China’s political influence in Australia”. The New York Times headline asked: “Are Australia’s politics too easy to corrupt?” while The Economist referred to China as the “Meddle Kingdom”.

These articles were reacting to an investigation by Fairfax Media and ABC into the extent of China’s political interference in Australia. These built on internal enquiries into the same issue by ASIO and Australia’s Department of Prime Minister and Cabinet in 2015 and 2016.

The media and official reports concluded that Australia was the target of a foreign interference campaign by China “on a larger scale than that being carried out by any other nation” and that the Chinese Communist Party (CCP) was working to infiltrate Australian political and foreign affairs circles, as well to acquire influence over Australia’s Chinese population.

According to a Herald-Sun front page, donations amounting to $6 million over the last five years were made by a Beijing influenced business front, the APPRC.

The head of the APPRC, Huang Xiangmo withdrew $400,000 from the Opposition when Labor supported navy patrols in the South China Sea. Fears about “prospective” damage to Australian trade or investment by China must not deter us from clear-eyed opposition to Beijing’s political intervention, such as buying control of local Chinese language press.

The Foreign Investment Review Board (FIRB) reports that in the financial years 2010-2011 to 2015-2016 there has been $169 billion of investment in Australia from China. Investment has risen from $16.91billion in 2010-2011 to $47.3 billion in 2015-2016. This is nothing to be alarmed about. Yet there are obvious pitfalls with such huge investments.

In 2014, Australia’s then communications minister, Malcolm Turnbull, proposed that China’s telco, Huawei, bid for the NBN. Australian agencies feared a Huawei- engineered technological “back door” to our secret communications. Turnbull’s proposal was dropped.

Then a myopic Northern Territory Government sold a 100-year lease on the Port of Darwin to Beijing interests for a mere $500 million.

After that “own goal”, former ASIO chief David Irvine was appointed to FIRB. Then, a Beijing-based investment in AUSGRID, Australia’s largest electrical network and owned by the government of NSW, was barred by the FIRB. Striking the right balance, a state- based interest of China won a 25 per cent interest in the successful bid of $9.7 billion for the Port of Melbourne.

The $169 billion investment in Australia over the past five years by China is “the big picture”. It debunks the alarmism of some that “opportunities are being squandered and shows we can hardly be seen as suppressing China’s ongoing investments.

Attempts to influence local academia are less easily countered. Even before Frances Adamson, secretary of DFAT put this issue on the front page, Prof Allan Fitzgerald in an AFR essay “Red pen on academic freedom” argued that: “Universities jeopardise intellectual integrity when they collaborate with Chinese institutions that do not share a commitment to liberal values and open inquiry”. 

There are now 14 Confucius institutes in Australian universities, along with the pro-Beijing think-tank - Australia China Relations Institute (ACRI). It’s hardly McCarthyism to point out that ACPPRC or organisations like it have connections to the Chinese Communist Party.

Beijing continues to flout international law, sought by ASEAN to stop China’s militarisation of the South China Sea, where 60 per cent of Australia’s maritime trade transits.

Canberra’s Joint Select Committee on Electoral Matters will likely recommend, and federal Parliament endorse, banning foreign donations to parties. FIRB will prevent future imbroglios like the sale of the Port of Darwin.

Finally, Beijing’s interference in universities, think-tanks, institutes and parties will be subject to media and parliamentary scrutiny.

Nervous Nellies advocating a “hands off” policy for investments from China should be reassured that commercial arrangements will continue to prosper.

Pro-Beijing academic and business interests should never override Australia’s national security, firmly rooted in the ANZUS alliance and our deeply democratic ethos.

Michael Danby - Federal Member for Melbourne Ports

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