jeudi 21 septembre 2017

Rogue Nation

China Wields Its "Laws" to Silence Critics From Abroad

Lee Ming-cheh, second from left, an activist from Taiwan, in court in the Chinese city of Yueyang, Hunan Province, last week. The case against Mr. Lee punctuates what critics warn are China’s efforts to stifle what it perceives as threats from overseas. 

BEIJING — On the morning he disappeared, the activist Lee Ming-cheh crossed from Macau into mainland China to meet with democracy advocates.
It was 177 days later when he reappeared in public, standing in the dock of a courtroom in central China last week, confessing to a conspiracy to subvert the Communist Party by circulating criticism on social media.
The circumstances surrounding Mr. Lee’s detainment remain murky, but what has made the case stand out from the many that the Chinese government brings against its critics is that Mr. Lee is not a citizen of China, but rather of Taiwan, the self-governing island over which Beijing claims sovereignty.
The proceedings against Mr. Lee, who is expected to be sentenced as soon as this week, punctuated what critics have warned are China’s brazen efforts to extend the reach of its security forces to stifle what it perceives as threats to its power emanating from overseas.
In recent months alone, China has sought the extradition of ethnic Uighur students studying overseas in Egypt and carried out the cinematic seizure of a billionaire from a Hong Kong hotel in violation of an agreement that allows the former British colony to run its own affairs. 
The billionaire, Xiao Jianhua, now appears to be a material witness in another politically tinged investigation against the Chinese conglomerate Dalian Wanda.
China abruptly surfaced charges of "rape" against yet another billionaire, Guo Wengui, after he sought political asylum in the United States, where he has been making sensational accusations about the Communist Party’s leadership. 
Mr. Guo’s case could become a major test for the Trump administration’s relations with Beijing at a time of tensions over North Korea and trade.
The Chinese billionaire Guo Wengui has sought political asylum in the United States.

“China has been extending its clampdown — its choking of civil society — throughout the world, and often it is attempting this through official channels such as the U.N. or Interpol,” said Michael Caster, a rights campaigner who was a co-founder of the Chinese Urgent Action Working Group. “Unfortunately, they’re very adept at doing it.”
The Chinese Urgent Action Working Group, which provided seminars for lawyers and legal aid for defendants in China, folded last year after the country’s powerful Ministry of State Security arrested and held Mr. Caster’s colleague, Peter Dahlin, a Swedish citizen, for 23 days.
Mr. Caster noted that Interpol’s president, Meng Hongwei, is a veteran of China’s state security apparatus. 
Human Rights Watch recently reported that China was blocking the work of United Nations agencies investigating rights issues and preventing critics from testifying at hearings, including in one case the leader of the World Uyghur Congress, Dolkun Isa.
China’s economic clout has meant that few countries are willing to do much to challenge its extraterritorial legal maneuvers. 
Some have even gone along.
And countries as varied as Armenia, Cambodia, Indonesia, Kenya, Spain and Vietnam have all extradited to China scores of people accused in a spate of telephone swindles targeting Chinese citizens, even though the suspects are, like Mr. Lee, citizens of Taiwan.
Treating Lee Ming-cheh as a mainland Chinese marks a major watershed,” said Hsiao I-Min, a lawyer at the Judicial Reform Foundation in Taiwan, who accompanied Mr. Lee’s wife from Taiwan to attend the trial.
Peter Dahlin, a Swedish citizen, was arrested in China and held for 23 days last year.

Mr. Lee’s case has added new strain in relations with Taiwan, which have soured since the election last year of a new president, Tsai Ing-wen
China has cut off official communications with Ms. Tsai’s government over her refusal to voice support for what Beijing calls the “1992 consensus,” which holds that the mainland and Taiwan are both part of the same China but leaves each side to interpret what that means.
In response to Mr. Lee’s legal odyssey, Ms. Tsai’s government has been relatively muted. 
“Our consistent position on this case is that we will do everything in our power to ensure his safe return while protecting the dignity of the nation,” said a spokesman for the presidential administration, Alex Huang.
China and Taiwan had in recent years cooperated on criminal investigations under a protocol that required each to notify the other in cases involving the arrests of its citizens. 
The Chinese government has recently abandoned such diplomatic niceties, officials in Taiwan say.
Taiwan’s government was notified of Mr. Lee’s arrest only when the public was — 10 days after his detainment in March near Macau, the former Portuguese colony that, like Hong Kong, is a special administrative region of China with its own legal system.
Mr. Lee, 42, assumed enormous risk to make contact with rights campaigners inside China. 
A manager at Wenshan Community College in Taiwan’s capital, Taipei, Mr. Lee volunteered for a rights organization called Covenants Watch and often traveled to the mainland.
Mr. Lee’s wife, Lee Ching-yu, learned his case had come to a head when a state-appointed lawyer contacted her this month. 
She only found out about his court appearance last week in Yueyang, in the southern province of Hunan, from news reports that circulated two days later, according to Patrick Poon, a researcher at Amnesty International.

Lee Ching-yu, the wife of Mr. Lee, departing for her husband’s trial in China from an airport in Taipei, Taiwan, this month. 

According to excerpts released by the Yueyang Intermediate People’s Court, Mr. Lee entered a guilty plea. 
He appeared with a Chinese co-defendant, Peng Yuhua, and together they were accused of trying to organize protests using the social media platforms WeChat and QQ, as well as Facebook, which is banned here.
Mr. Lee told the court that watching Chinese state television during his prolonged detention convinced him that he had been deceived by Taiwan’s free news media and was wrong about China’s political system. 
“These incorrect thoughts led me to criminal behavior,” he said.
Mr. Hsiao, the lawyer from Taiwan, said none of Mr. Lee’s acquaintances had heard of the co-defendant. 
Mr. Peng testified that together they had established chat groups online and formed a front organization, the Plum Blossom Company, with the aim of fomenting change. 
Mr. Hsiao said that no such company existed.
He was a fake,” Mr. Hsiao said of Mr. Peng. 
“This guy does not really exist. He was playing a role.”
Ms. Lee, too, denounced her husband’s trial as a farce
“Today the world and I together witnessed political theater, as well as the differences between the core beliefs of Taiwan and China,” she said at her hotel in Yueyang, adding that the “norms of expression in Taiwan are tantamount to armed rebellion in China.”
Mr. Lee’s case has echoes of the fate of five booksellers in Hong Kong, four of whom who were spirited out of the semiautonomous city in the fall of 2015 after publishing gossipy material about Chinese political intrigues, which, while legal in Hong Kong, is not in China.
One bookseller, Lee Bo, is a British citizen. 
Another, Gui Minhai, is a naturalized Swedish citizen; he vanished from his seaside apartment in Pattaya, Thailand, in October 2015 and returned to China in a manner that has not been fully explained. 
He appeared on state television in January 2016 and said he had voluntarily returned to face punishment for a fatal car accident in 2003. 
He remains in prison.
“What happened to my father is a much larger issue,” Mr. Gui’s daughter, Angela Gui, who has been campaigning for his release, wrote in an email. 
“It shows that foreign citizens aren’t safe from Chinese state security, even when they are outside China’s borders. I find it strange that governments aren’t more worried about China’s new self-proclaimed role as world police.”

Rogue Nation

Energy firms operating in the South China Sea face two options: Bow to Beijing or suffer
  • Beijing's willingness to use military threats in the South China is a worrying development for energy players
  • Firms that ignore Chinese demands could face on-site harassment, exclusion from the Chinese market and threats to company staff
By Nyshka Chandran 

As the world's second-largest economy threatens military action in the South China Sea, oil and gas players with interests in the disputed zone are put in a bad place.
That was the case for Spanish energy firm Repsol
In July, its subsidiary Talisman-Vietnam was ordered by Hanoi to stop gas drilling in a China-claimed area after Beijing warned the Southeast Asian country that it would attack bases if operations continued.
Xi Jinping's administration's use of military retaliation is "a worrying escalation" and could result in further pressure on future business dealings, said Hugo Brennan, Asia analyst at Verisk Maplecroft, in a Wednesday note.
Companies that have interests or operations in blocks licensed by Southeast Asian governments but located within China-claimed waters are likely to face pressure from Beijing, according to Brennan.
There are many overlapping claims in the region. 
China relies on a concept known as the nine-dash line to mark its territorial claims — a massive area that extends roughly 1,000 miles from its southern shores — in the South China Sea. 
But Vietnam, the Philippines, Malaysia and Brunei also assert sovereign rights over parts of the international waterway, which is rich in resources and boasts key maritime routes.
Against that backdrop, firms licensed by other countries to operate in disputed ares will face Chinese protestations. 
Any company ignoring those would likely face consequences such as on-site harassment, de facto exclusion from the Chinese market and even threats to company staff and assets, Brennan said. 
BP experienced the latter option in 2007, he added.
"Operators also have to analyse the resolve of Southeast Asian governments to stand up to China. Otherwise, companies with rights to develop blocks or fields in contested waters may find that they are prevented from exercising them as host government become wary of rocking the boat."
The next potential flash-point could be Vietnam's Red Emperor oil and gas field, also called Ca Rong Do
Repsol is active in the project, which is located within China's nine-dash line, and drilling is slated for 2019. 
But in light of Chinese threats, it remains to be seen how much progress the Madrid-based firm will make, Brennan said.
Regional players are already taking defensive action in response to China's aggressive behavior.
Indonesia, which isn't a claimant in the South China Sea drama but maintains an exclusive economic zone there, recently announced intentions to use its military to provide security for resource exploration activities.
However, "blurring the lines between commercial and naval activities in this way raises the potential for oil and gas assets to become targets in any militarized confrontation," Brennan said.
Even as China prevents others from tapping hydrocarbon deposits located within its nine-dash line, it's in no rush to develop those assets. 
That's likely because 71.2 percent of total discovered reserves within the nine-dash line are "not currently considered commercially viable," according to Brennan.

mercredi 20 septembre 2017


China still helps to preserve North Korea’s government.
By Michael Schuman
Made with a big help from Chinese friends

BEIJING – In Donald Trump’s struggles to confront the escalating threat of North Korea’s nuclear program, one factor has always loomed large: China
Trump believes Beijing, Pyongyang’s chief ally, could take advantage of its political and economic clout to persuade North Korea’s dictator, Kim Jong Un, to cease his threatening missile launches and curtail his nuclear ambitions. 
“China is very much the economic lifeline to North Korea so, while nothing is easy, if they want to solve the North Korean problem, they will,” he once tweeted.
China, though, insists its hands are tied. 
Trump, the Chinese claim, overestimates their ability to influence their unruly Stalinist neighbor. “The so-called ‘China responsibility theory’ is based on a poor understanding of the nuclear issue on the Korean Peninsula, as well as baseless efforts to shift responsibility for the complicated problem onto China,” went one typical comment in a Communist Party newspaper in August.
Who’s right? 
It is true that the relationship between Beijing and Pyongyang can often be more strained and tempestuous than Trump seems to believe. 
But a look at North Korea’s economic relations with the world shows that China’s leaders clearly hold leverage over Pyongyang – perhaps even the power of life and death – if they choose to use it
“The Chinese government is the major supporter of the DPRK,” says Nicholas Eberstadt, a specialist in political economy at the American Enterprise Institute, using the acronym for North Korea’s official name, the Democratic People’s Republic of Korea. 
The DPRK is such a dysfunctional economy that it requires a steady stream of subsidies from abroad to prevent it from going into vapor lock.”
Eberstadt’s statistics expose how, as he puts it, China is “the only game in town” for North Korea, at least when it comes to merchandise trade. 
In 2014, the latest year of data, China bought two-thirds of all of North Korea’s exports, worth $2.6 billion, and provided almost as large a share of the country imports, at $3.9 billion. 
More critically, China’s importance to North Korea has grown significantly during the past two decades, as Pyongyang’s economic ties to the rest of the world have withered (most notably, with Russia, which had been a major patron.) 
In 1990, China accounted for less than 6 percent of North Korea’s total exports and only 13 percent of its imports.
Those figures may not tell the entire story. 
Eberstadt says the relationship between China and North Korea is so opaque that it is difficult to understand the true extent of their economic exchange. 
North Korea doesn’t release economic data, and the official statistics from the Chinese government could understate the amount of their trade. 
For instance, China is almost certainly the largest provider of oil to North Korea, but that may not be reflected in Chinese data.
China’s trade with North Korea has also helped Pyongyang dodge United Nations sanctions, imposed by the Security Council to compel Kim Jong Un to the negotiating table. 
In a September report, a U.N.-sponsored panel of experts concluded that North Korea “continued to export prohibited commodities,” which helped the regime raise much-needed funds. 
By the panel’s count, Pyongyang earned $270 million from such illegal exports over a recent period of several months. 
China figures prominently in this trade by buying silver and other restricted commodities. 
For instance, China’s imports of iron and steel from North Korea reached $37 million – more than 80 percent of Pyongyang’s total sold abroad – during that time period.
China also helps North Korea evade sanctions that are supposed to block its access to the international banking system. 
Agents of North Korea, for example, are known to register companies in Hong Kong, set up offices in China and then utilize Chinese banks to conduct foreign financial transactions.
William Newcomb, a visiting scholar at the U.S.-Korea Institute at Johns Hopkins University, and a former deputy coordinator of the U.S. State Department’s North Korea Working Group, believes that Beijing could and should be taking sterner action against such illicit networks. 
“China has an extraordinarily good security service. I don’t believe for a minute that they don’t know who the North Koreans are and what they’re up to and who’s working with them but we don’t see any kind of follow-up.”
The Chinese do seem in recent months to have upped their efforts on sanctions against North Korea. The U.N. report shows that China’s trade with North Korea in certain areas has declined. 
Still, there appears to be a limit to how far Beijing is willing to go. 
China fears squeezing North Korea so hard that it leads to the country’s collapse, an outcome Beijing has traditionally wished to avoid. 
“It is true that for political and geographical reasons, China is the ‘economic lifeline of North Korea,’ but such economic aid, from a Chinese perspective, is necessary to maintain the stability of North Korea so as to avoid a ‘hard landing’ or even an ‘implosion,’” one commentary in the Communist Party-run Global Times explained.
That’s a big reason why economic sanctions may not bring Pyongyang to heel. 
Earlier this month, the U.N. Security Council agreed to impose the toughest measures yet against North Korea, including a ban on its lucrative textile exports, restrictions on the ability of North Koreans to work overseas, and a prohibition on any joint ventures with the country’s companies. 
In theory, these measures will cut Pyongyang off from billions of dollars of income. 
But in the end, their effectiveness will depend on how strictly China and other countries enforce them.
“Sanctions work a lot better if China and Russia get on board and are faithful in their implementation,” says Newcomb.
Washington continues to try to prod China in that direction. 
The U.S. Treasury Department recently announced sanctions on Chinese business for aiding the Pyongyang regime, and has threatened to take further measures. 
But it isn’t clear Beijing will succumb to such pressure from Trump.
“The Chinese have been OK with North Korea’s behavior as long as it is more a problem for the U.S. than China,” says AEI’s Eberstadt. 
“The question is how far does the cost-benefit analysis have to change for the Chinese approach to North Korea to change in an appreciable manner?”

Holy Alliance

India, Japan Expected to Increase Maritime Activity Aimed at China
By Ralph Jennings
Japanese Prime Minister Shinzo Abe, right and Indian Prime Minister Narendra Modi wave during the ground breaking ceremony for high speed rail project in Ahmadabad, India, Sept. 14, 2017.

TAIPEI, TAIWAN — India and Japan, anxious to keep Asia’s dominant power Beijing in check, may send patrols into the contested South China Sea or sell arms to rival states following a pair of high-level meetings this month, experts say.
Both Asian countries could sell or donate more weapons to China’s rival maritime claimants, such as Vietnam, so they can build a defense against Beijing.
Japan may also use coast guard or naval ships to patrol the sea to show it’s open despite China’s claim to some 90 percent of it.
India will probably continue joint exploration with Vietnam for oil and gas under the 3.5 million-square-kilometer sea, analysts say.
“Delhi and Tokyo have both been stepping up their capacity-building efforts in the region, with Japan focused mainly on providing patrol vessels and training for Southeast Asian states and India selling arms to and training the Vietnamese navy,” said Gregory Poling, director of the Asia Maritime Transparency Initiative of the American think tank Center for Strategic and International Studies.

Two High-Level Talks in a Week

Japanese Prime Minister Shinzo Abe met counterpart Narendra Modi in India Sept. 13-14 to discuss “enhancing maritime security cooperation,” according to a foreign ministry statement from Tokyo.
On Monday their foreign ministers met at the United Nations with U.S. Secretary of State Rex Tillerson to talk about freedom of navigation and respect for international law, the Indian external affairs ministry spokesman said.
Analysts understood both discussions to be aimed at China, including its expansion in the contested sea since 2010.
Neither India nor Japan claims the South China Sea, but the two have warily eyed China’s ascent to being the largest economy and military power in Asia. 
And despite the meeting with Tillerson in New York, the U.S. government is seen as preoccupied by the militarization of North Korea.

Arms for China’s Smaller South China Sea Claimants

Japan as well as India could sell more weapons to the four Southeast Asian states whose coastal waters overlap China’s claim to the sea, analysts say.
Japan indicated in January it would give Vietnam six patrol boats to help with maritime security. Vietnam has clashed three times since the 1970s with Chinese vessels. 
In August last year, Japan began giving the Philippines 10 coast guard boats through a soft loan agreement.
India has talked to Vietnam about supplying it BrahMos supersonic cruise missiles, which are co-developed with Russia, among other missiles, leading a state-backed Chinese media outlet earlier this year to accuse India of causing trouble. 
India in September 2016 offered Vietnam a $500 million line of credit to buy defense hardware, including patrol boats.

Sending Patrol Missions into the Disputed Sea

Japan may test China with low-key patrols of the sea, said Le Hong Hiep, research fellow with the ISEAS Yusof Ishak Institute in Singapore. 
In May it sent an Izumo helicopter-carrying warship into the sea for port visits in Southeast Asia en route to joint exercises with the United States.
“What they have done is they send a ship to Gulf of Aden and on the way back they do kind of patrol in the South China Sea and do port calls to Vietnam, et cetera,” Le said. 
“But they do not intentionally design any kind of (freedom of navigation) program in the South China Sea as it may provoke China.
“But in the future I’m not sure, because Japan obviously has some interest in containing China’s ambitions in the South China Sea as well,” he said.
Patrols would show the sea, also packed with fisheries, is open to other countries despite Beijing’s claim of sovereignty to the waterway off its south coast. 
China has strengthened control and angered rival claimants by using landfill to build artificial islands ready for combat aircraft and radar systems.
Brunei, Malaysia, Vietnam and the Philippines claim all or part of the same sea.
India and Japan might patrol the sea together with coast guard ships, said Andrew Yang, secretary-general of the Chinese Council of Advanced Policy Studies think tank in Taiwan. 
They would occasionally send naval vessels, he added.
“Maybe they will increase the momentum of their joint activities in order to demonstrate that Japan and India are closely cooperating in terms of regulating the so-called rule-based behavior in the South China Sea and the region,” Yang said.

India’s Overtures in Southeast Asia

India, as part of a fast-growing trade and investment relationship with Vietnam, can further assert itself in the South China Sea by working with Vietnamese firms on exploration for oil and gas, Le said.
For the past three years, the overseas subsidiary of India’s government-run ONGC has worked with PetroVietnam Exploration Production Corporation to search for oil and gas in the South China Sea. That cooperation helps Vietnam improve its "bargaining power" with China, Le said.
Since losing a world arbitration court verdict over its claim to the South China Sea last year, China has sought favor with Southeast Asian countries through economic aid and investment. 
Malaysia, Vietnam and the Philippines are accepting China’s overtures -- along with the same from other major nations.
The Philippines, for example, welcomes Japanese aid because the public and the China-friendly government have long trusted Tokyo, said Maria Ela Atienza, political science professor at University of the Philippines Diliman. 
Filipinos know less about India, she said, but Japan could bridge the gap.
“At least people are not so aware of possible positive relations with India,” Atienza said. 
“But if it’s an alliance, maybe if Japan can vouch for India, perhaps that can build confidence in terms of the partnership.”

Nation of Thieves

Chinese companies stole Hitachi Metals trade secrets
By Hudson Lockett, Shawn Donnan

Hitachi Metals has filed a complaint with the US International Trade Commission against Chinese companies it alleges stole trade secrets for manufacturing ribbons made of a special alloy.
The complaint, filed by Hitachi and its US subsidiary Metglas, requests the commission investigate the companies in question, ban imports to the US of related products and issue a cease and desist order barring sale, marketing and distribution of products already in the US.
The product at the centre of the allegations is amorphous metal ribbon, or AMR – thin ribbons of a special alloy produced using trade secrets.
Amorphous metal is commonly used in electronic transformers and magnetic theft-prevention tags. The complaint to the ITC names companies including Beijing ZLJG Amorphous Technology and Qingdao Yunlu Energy Technology as having misappropriated trade secrets.
It also names two Japanese nationals and former Hitachi Metals employees as having provided said secrets to these companies. 
Hitachi argues in the complaint that substantial output growth of AMR in China from 2012 to 2015 – which it asserts occurred in the absence of any growth in production capacity – “could only have happened by receiving knowledge” of its trade secrets, which it says would have increased production efficiency.
Hitachi says one China-based company, AT&M International Trading, even filed an antidumping petition against itself and Metglas in September 2015, which alerted it to the rapid growth in China’s AMR output capacity since 2012.
Section 337 cases such as the one filed by Hitachi are often brought by US companies claiming IP violations by Chinese companies.
But cases alleging industrial espionage are relatively rare and not always successful.
US Steel last year filed an unsuccessful Section 337 case against Chinese competitors calling for a broad ban on steel imports from China because of espionage.
The steel maker claimed that government-backed Chinese hackers had stolen its formula for special high-strength steel used in automobiles.
But it struggled to prove any link between the hackers, who were charged with the theft by US prosecutors, and the product made by Chinese companies.

mardi 19 septembre 2017

Chinese Fifth Column

Australian university's research being used for China's military purposes
By Anders Furze and Louisa Lim

Li Keqiang (centre right) attends a signing ceremony with Australian prime minister Malcolm Turnbull at the Great Hall of the People in Beijing on 14 April 2016. 

Aworld-first collaboration between the University of New South Wales and the Chinese government, celebrated as a $100m innovation partnership, opens a Pandora’s box of strategic and commercial risks for Australia.
These include the loss of sensitive technology with military capability, an unhealthy reliance on Chinese capital and vulnerability to Beijing’s influence in Australia’s stretched research and technology sector.
The UNSW Torch Innovation precinct, the first outside China, was unveiled last year with Malcolm Turnbull present at the signing ceremony in Beijing’s Great Hall of the People, alongside the Chinese premier, Li Keqiang.
Since 1988 the Torch program has brought businesses together with universities and researchers inside China to create high-tech startups. 
The Chinese government says it has accounted for 11% of the country’s GDP. 
This $100m deal included an initial $30m from eight Chinese companies to support Australian research.
Since then 29 Chinese partners and one Indian one – Adani Solar, a subsidiary of the resources giant – have signed on to the UNSW Torch project. 
They include at least seven firms working in industries with dual use military potential such as aerospace, GPS navigation, underwater cameras and nanotechnology
The research is not funded directly by the Chinese government but by the companies themselves.
One of the companies participating in the scheme is Huawei Technologies, the Chinese firm banned from participating in Australia’s national broadband network in 2013 on security grounds, based on the advice of Asio – the Australian national security agency. 
Earlier this year, it was reported that Nick Warner, the Australian Secret Intelligence Service’s director general warned the Solomon Islands against using Huawei to connect its under-sea cable.
On its Torch website designed to draw in potential investors, the university highlights research with explicitly military applications such as unmanned military vehicles.
Richard Suttmeier, an American expert on China’s science policy and emeritus professor at the University of Oregon, raised US concerns that Beijing’s aggressive decades-long technology acquisition drive was allowing China to quietly supersede other countries in certain fields.
On the UNSW cooperation he said: “One can’t help wondering about a Faustian bargain quality to the program. Increasingly China is able to dangle very, very attractive incentives for cooperation. International partners can reap benefits in the short run but may lose out in the longer run if they lack farsighted strategies.”
Clive Hamilton, professor of public ethics at Charles Sturt University, said: “I think the Torch program will make UNSW a client university of the People’s Republic of China in its science and technology areas, and more broadly because PRC and its agencies will have a huge amount of sway over university decision-making.”
Rory Medcalf, the head of the Australian National University’s national security college, has expressed concern that research with potential for military use could bypass existing controls.
UNSW and HCCL joint laboratory on the university’s Sydney campus. The Torch program will make UNSW a client university of the People’s Republic of China in its science and technology areas.

“The fundamental question to ask is if there is [a] prospect of technology discoveries being shared that could potentially give China a military advantage in the region over, for example, US and its allies, and therefore potentially Australia.
“This is not necessarily about issues of war or conflict, which nobody wants. But it’s about issues like surveillance, detection, submarine activity; areas where our militaries are, to be honest, competing with one another day to day.”

Academic Quislings
Brian Boyle, UNSW’s deputy vice-chancellor (enterprise), championed the Torch project as “delivering a return on investment for Australia through our outstanding and competitive research base”.
The UNSW website hosts Torch-branded “research capability statements” that showcase the university’s research strengths to potential Chinese investors. 
At least three trumpet specific military applications, including “impact and blast-resistant construction materials” developed at the Australian Defence Force Academy.
Another project concerning high-speed, high-precision self-driving vehicles listed a potential application as being “unmanned military vehicles”.
Asked why UNSW was touting military research to potential Chinese investors, Boyle said they were for “general purpose use”. 
When asked why they were on the Torch website, he replied, “That’s our key customer base at the moment.”
“We follow the rules,” he added.
UNSW has been explicit in its motivations for seeking alternatives to Australian government funding. “We didn’t want to keep going back, cap in hand, to Canberra asking for more,” Ian Jacobs, its vice chancellor, wrote in an in an article for the Australian newspaper last year. 
“Instead, we went to China.”
In a separate opinion piece, for the Australian Financial Review, Jacobs wrote: “To join China’s innovation train, we need to move quickly and take on a degree of risk.”
Boyle said: “We believe that in taking these financial and technological risks we are performing the best service to Australian society.”
The university has also been upfront about the central role played by China’s Ministry of Science and Technology in the Torch enterprise. 
Chinese officials have handpicked the first group of companies participating in the scheme. 
The university offers Chinese companies looking to invest in the precinct rent-free office space and tuition scholarships for employees to undertake PhDs.

Chinese mole
The flagship project under Torch is a $20m collaboration between UNSW engineer Sean Li and Hangzhou Cables, which helped fund a $10m laboratory on the university’s Randwick campus, as well as a second collaborative lab in Hangzhou alongside the company’s production facilities where prototypes of the new graphene electricity transmission cables can be produced faster than in Australia. 
It took just three months to open the lab after the negotiations were finalised.
For Li, who joined UNSW 13 years ago, this collaboration marks a huge positive shift in university culture. 
“Now we are doing something to convert fundamental research to practical application,” he said, describing how he has filed nine patents in the past two years.
“This is a big change for myself, and for the university. That’s why the Torch precinct is a very, very rapid development.”
The partners have set up a joint venture, with UNSW taking a 20% stake to Hangzhou Cable’s 80%, and royalties shared equally between the two sides. 
Li confirmed that the new technology had been subject to checks under defence trade control legislation.
The 150 Torch precincts inside China play a key role in Beijing’s full-throttle mission to become a technology power. 
Its ambition – articulated under the banner “Made In China 2025” – is to have 70% of the country’s manufacturing supply chain fed by Chinese companies by 2025. 
China’s broader science policy, described as “technonationalism”, feeds its voracious appetite for cutting-edge technologies.
Promoting its Torch collaboration, the university declares its potential to play a powerful role in China’s development. 
“The rise of a great power needs more. It needs UNSW,” is the sign-off line in the university’s official Torch promotional video.
Jacobs has also explicitly linked Torch with the “Made in China 2025” policy, and China’s desire to become a world technology and science powerhouse by 2049. 
“To get there will require not only an immense national effort by China but also strong and enduring international collaborations,” he told a gala event last year. 
“That’s where we come in.”
One vocal supporter is John Saunders of the Linden Group, infrastructure specialists with close Chinese ties, who believes such schemes should receive more support. 
“I think the UNSW needs to broaden this. I think it needs much bigger commitment from federal government, and I certainly think it can be – not replicated – but can become a model elsewhere in Australia.”
Turnbull declined to comment on the Torch concerns, instead referring to a statement from the Department of Education and Training: “The Australian government is supportive of innovative ideas, which grow Australian society and develop our reputation as a partner of choice internationally.”
UNSW is not the only Australian institution wooing Chinese Torch officials. 
In May, a 20-strong Torch delegation from China visited Griffith University’s Gold Coast campus as part of an exploratory tour of south-east Queensland. 
That came two months after Queensland minister Kate Jones met Torch representatives in China to discuss promoting the Gold Coast “health and knowledge precinct” as a future Torch project.
Nor is it the only university wooing Chinese money. 
The University of Technology Sydney (UTS) has launched a centre for advanced science and technology research, funded by the state-owned China Electronics Group Corporation (CETC), a deal worth $20m over five years
Meanwhile, the University of Melbourne and RMIT are opening an incubation space providing Chinese funding of $80m in partnership with the City of Melbourne and the Australian China Association of Scientists and Entrepreneurs.
In the rush to cash in on Chinese funding, Australian institutions have failed to recognise the potential risks.
“On one hand, the universities have been forced into a position where they’re just out busking for money,” says Stephen Fitzgerald, the first Australian ambassador to China in the early 1970s. 
“On the other hand we have a government that seems to be incapable of taking a serious, considered, long-term, strategic view of our relations with China.”
Peter Jennings, executive director of the Australian Strategic Policy Institute, said. “Universities have never met a dollar they didn’t like … [They] have been frankly a bit wilfully blind to the implications of getting too financially dependent on China.”
In the rush to cash in on Chinese funding, Australian institutions have failed to recognise the potential risks.

Australian kowtow
The UNSW Torch promotional video trumpets the university’s role in supporting the rise of a “great power”. 
Boyle said UNSW’s mission was to have global impact. 
“If by having a global impact one supports the development of another country as well as the development of Australia, I think that’s well within Australia’s defence mandate to do that.”
A central concern of many experts is the potential military application of technologies being developed in partnership with Chinese companies. 
They caution that emerging technologies are often so complicated that scientists can’t forecast how their work will be used, including whether it might have so-called “dual use” civilian/military applications. 
The monitoring of the development and use of cutting-edge technologies is a particularly thorny issue, given the level of specialisation required to understand the implications of such research, and the complexities of attempting to control constantly evolving technologies.
“These are highlighting some of the real challenges of the 21st century, when what is military research and what is civilian research don’t really have meaningful distinctions,” says Dr Margaret Kosal, from the Sam Nunn school of international affairs at Georgia Institute of Technology, who conducts research on potential proliferation threats of nanotechnology.
Medcalf said: “The problem is with some of these technologies, potential for dual use may be there but we won’t know the full extent of the dual use or the full extent of the risk until after the technologies have been shared. In other words, having an export control and licensing arrangement, as we’ve done in the 20th century, for military and dual use technologies, will be too late.”
The mood in Washington has recently shifted towards fear that China’s unabashed focus on innovation, combined with its traditional disregard for intellectual property protection, will inexorably lead to Beijing superseding the US as the world’s leading technology power.
Suttmeier, who briefed President Barack Obama’s council of advisers on science and technology, said: “I think the US has woken up to the sophistication of Chinese technology development strategies, and to the overall thrust of Chinese industrial policies which lie behind a lot of these questions.”
Attempts to contact the Chinese embassy in Canberra and the Ministry of Science and Technology in Beijing for comment did not yield a response.
Plans for phase two of the Torch precinct include the redevelopment of 100,000 square metres at UNSW’s Randwick campus, a project which Yuan Wang, the Torch project manager, said would require capital investment in the order of $1bn. 
She said potential future areas of joint research could include artificial intelligence and telecommunications.

Some of the companies collaborating with UNSW Torch project
  • Nanjing Sunport Power Corp
  • Fuzhou Danlaw Xicheng Electronic Technology Company (China)
  • Shenzhen Kohodo Sunshine Renewable Energy Company
  • IPower Innovation Technology/ShenZhen Smart Power Company
  • FCJ/Zhejiang Hangdian Graphene Tech Company
  • Beijing Origin Water Technology Company
  • CEC Energy
  • Suzhou Londerful Nanotechnology Company
  • LERRI Solar Technology (Taizhou)
  • Huawei Technologies (China)
  • Australian Wetouch Technology
  • Qingdao Robotfish Marine Technology
  • O&C Electric Technique Company
  • Jiangsu Leadmicro Nano-Equipment Technology 
  • South Navigation
  • Beijing Etechwin Electric Company
  • SolarWorld Innovations
  • Tongwei Solar
  • Ming Jing Singapore Holdings 
  • Phono Solar Technology Company
  • Pou Chen Corporation 
  • Double Medical 
  • Qingdao National Laboratory for Marine Science and Technology
  • Tianjin Sungene Biotech Company
  • Beijing Engineering Research Center 
  • Shandong Tongda Marine Science and Technology Company
  • Easthigh
  • Wind Power
  • Adani Solar
  • Yixing Environmental Science and Technology Park

Trump’s Top Trade Negotiator Calls China "Unprecedented Threat"

  • WTO not equipped to deal with China’s economy, Lighthizer says
  • China subsidizing companies and distorting markets
By Andrew Mayeda

Robert Lighthizer 

China’s economic model represents an “unprecedented” threat to the world trading system that can’t be addressed under current global rules, President Donald Trump’s top trade negotiator said.
“There is one challenge on the current scene that is substantially more difficult than those faced in the past, and that is China,” U.S. Trade Representative Robert Lighthizer said Monday in a speech in Washington. 
“The sheer scale of their coordinated effort to develop their economy, to subsidize, to create national champions, to force technology transfers and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented.”
The World Trade Organization and the rules that underlie the international trade arbitrator weren’t designed to deal with China’s current approach to its economy, he said.

Lighthizer said he doesn’t want to jump to any conclusions from an ongoing USTR investigation into alleged intellectual property violations by China under Section 301 of the Trade Act. 
The provision allows the president to unilaterally impose tariffs and other restrictions to protect U.S. industries from unfair trade practices by foreign nations.
Lighthizer said that he doesn’t want to prejudge the investigation’s outcome, but he gets “an awful lot of complaints,” especially from American chief executives from major companies about having to hand over their technology to joint-venture partners in China, and on the issue of Chinese piracy.

First Speech

It was the first major public speech by Lighthizer, 69, who was confirmed in May as USTR. 
He worked for decades as a trade lawyer, representing clients including U.S. Steel Corp. 
He served as a deputy USTR under Ronald Reagan, earning a reputation as a hard-nosed negotiator. He also has deep political experience from his time as a senior aide to former Senate Finance Committee Chairman Bob Dole.
Lighthizer’s comments on China may damp speculation that the departure of White House Chief Strategist Steve Bannon, a staunch economic nationalist, would lead to a less hawkish tone on trade from the White House. 
While Trump has backed down from labeling China a currency manipulator and eased the gas pedal on slapping tariffs on steel imports, Lighthizer said on Monday that changes are coming to a system that leads to trade deficits and fails workers.

“There has been a growing feeling that the system that has developed in recent years is not quite fair to American workers and manufacturing and that we need to change,” he said. 
“We will have change in trade policy.”
He repeated that the Trump administration prefers bilateral deals to multinational accords. 
It will pursue one-on-one trade pacts with Asian nations, after Trump withdrew from a trans-Pacific deal in January, and through talks with the U.K. in the next year or two after it splits from the European Union.

Nafta Revamp

The U.S. has already set in motion Trump’s promise to revamp the North American Free Trade Agreement to tackle trade deficits. 
The U.S., Mexico and Canada are preparing for the third round of negotiations to revise the deal from Sept. 23-27 in Ottawa. 
Lighthizer has said the U.S. is seeking a major overhaul of the deal that will benefit American workers. 
The three sides are trying to reach a deal this year before elections in all three nations in 2018 raise political complications.
“We’re moving at warp speed, but we don’t know if we’ll get to a conclusion,” Lighthizer said.