Via Financial Times

When Australia’s top spy revealed this week that the intelligence service was investigating an alleged plot to plant a Chinese spy in the nation’s parliament, he fuelled both legitimate fears and a large dose of paranoia about interference from Beijing. 

Bo “Nick” Zhao, a 32-year-old luxury car dealer, had told Asio, Australia’s intelligence service, that a Chinese spy ring wanted to give him A$1m ($679,000) to run as a candidate for the ruling Liberal party. He was later found dead in unexplained circumstances in a hotel room.

Beijing has denied the allegations. It has also dismissed another man, who told Asio of his work for Chinese intelligence operations in Hong Kong and Taiwan, as a fraudster. Asio has said it was taking Zhao’s claims seriously. “Hostile foreign intelligence activity continues to pose a real threat to our nation and its security,” said Mike Burgess, director-general of Asio. 

The flood of sensational reports together with the confirmation of the Asio investigation have electrified a debate about attempts by the Chinese Communist party to infiltrate a country that is one of Washington’s closest allies. As the rhetoric has intensified, so have concerns about a backlash not just against Chinese investment but also against the large Chinese diaspora in Australia. 

“Chinese influence activities are happening all over the world but there is no doubt that Australia is at the vanguard of the debate,” said Adam Ni, an academic and co-editor of China Neican, a newsletter. “There is nowhere that these issues are being discussed in a more heated manner.” 

The shrill tone of the debate — one senator claimed this week that China wanted to move its citizens en masse to Australia — in a nation with a fast-growing ethnic Chinese population of 1.2m people has alarmed critics. Kevin Rudd, the former prime minister, warned against returning to the days of the “yellow peril” — a fear of Asian migration.

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“Having a debate about China is exactly what Australia should be doing,” said Richard McGregor, an analyst at the Lowy Institute, a Sydney-based think-tank. “But there is little doubt that in some cases it reaches deep into an insecure part of the Australian psyche, about not just being the odd man out in Asia, but also in a region which will be dominated by China rather than the US.” 

Western concerns about CCP interference have risen sharply in recent years, as Beijing’s claims of sovereignty over contested waters in the South China Sea and Taiwan have deepened geopolitical tensions. US authorities have stepped up counter espionage activities but Australia — a fellow member of the “Five Eyes” intelligence-sharing network alongside the UK, Canada, New Zealand — has also played a leading role. 

Foreign interference is “insidious” and its effects might take decades to be fully felt, by which time it could be too late, warned Duncan Lewis, a former head of Asio. “You wake up one day and find decisions made in our country that are not in the interests of our country,” he said.

Sam Dastyari leaves The NSW Independent Commission Against Corruption (ICAC) public inquiry into allegations concerning political donations in Sydney, Thursday, August 29, 2019. (AAP Image/Joel Carrett) NO ARCHIVING ** STRICTLY EDITORIAL USE ONLY **
Sam Dastyari, a former senator, was forced to resign after accepting a donation to pay his debts © AAP/PA Images

Last year, Australia became the first country to bar Huawei, the Chinese telecoms group, from participating in its roll out of 5G, the next generation wireless technology. Canberra later blocked a $9.5bn bid by Hong Kong’s CK Group for APA Pipelines, a strategically important infrastructure business. 

Australia has also passed foreign interference laws and this month issued new guidelines to universities amid concerns about co-operation on military research with Chinese companies, cyber attacks and academic freedom. 

The action has come in the wake of other Chinese influence scandals. Huang Xiangmo, a billionaire property developer who donated almost A$3m donations to the Liberal and opposition Labor party, was embroiled in a scandal involving Sam Dastyari, a Labor senator, in 2017. 

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Mr Dastyari was ultimately forced to resign when it emerged that he had called publicly for Australia to respect China’s territorial claims in the South China Sea after accepting a donation to pay his personal debts. Mr Huang was stripped of his Australian residency over intelligence concerns that he was an agent of influence. He has denied the claim. 

The sharp focus on the role played by the Chinese diaspora has alarmed some business leaders, analysts and community leaders. Beijing is Australia’s largest trade partner, with two-way trade worth A$213bn last year and businesses are concerned political tensions could boost domestic opposition to Chinese investment and provoke economic retaliation by Beijing.

These fears are also keenly felt at the nation’s universities, where one in 10 students is from China and clashes over the protests in Hong Kong have raised concerns about CCP influence.

“Some students feel a bit intimidated by all the media coverage on Chinese influence activities,” said Jacky He, student union president at the University of Sydney, which generates almost a quarter of its revenues from Chinese international students.

Mr He, who moved to Australia from China when he was 10, said Chinese students were often stereotyped in the media. “Being pro-China does not mean pro-CCP,” he said. 

One Chinese-Australian working in property, who lives on Sydney’s north shore, an area popular with Chinese immigrants, said the community was apprehensive. “My colleagues keep asking me about spies . . . I fear that people will become suspicious of Chinese people and think we are all the same,” said Mr Xiao, who did not want his full name published.

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