Australia's Chinese Fifth Column

Labor targets Sino-Australian Liberal MP Gladys Liu's links to Chinese Communist party
Scott Morrison pressed on whether Liu is a ‘fit and proper’ person to be sitting in federal parliament
By Sarah Martin

Gladys Liu in parliament on Wednesday. Liu did not answer directly about Chinese activities in the South China Sea.

Labor has targeted Scott Morrison over the credentials of Chinese-born MP Gladys Liu, asking what steps he had taken to ensure she was a “fit and proper” person to sit in parliament.
In question time on Wednesday, the shadow attorney general, Mark Dreyfus, led the attack on the government over Liu’s links to the Chinese communist party, but most of the opposition’s questions on the MP’s background were ruled out of order.
Morrison defended remarks made by Liu in a widely condemned interview with Andrew Bolt on Tuesday night, saying her position on the South China Sea could not be compared to remarks made by the former Labor senator Sam Dastyari.
“Not only was he a … shadow minister … in the executive of the opposition at that time, he seems to forget the fact that money changed hands between the then senator Sam Dastyari – money changed hands, and his position was bought by that,” Morrison said.
“He was caught in his own web of corruption, Mr Speaker. He should have resigned, and he did.”
Asked several times on Tuesday night if she believed China’s actions in the South China Sea amounted to theft and were unlawful, Liu said it was “a matter for the foreign minister”.
“I definitely put – I would put Australia’s interests first, and that’s exactly what I have been doing,” she said.
“My understanding is a lot of countries is trying to claim ownership sovereignty of the South China Sea because of various reasons, and my position is with the Australian government."

The foreign minister, Marise Payne, was also asked in the Senate if she was satisfied that Liu was “fit and proper” for the seat.
“Any suggestion that that is not the case is offensive,” Payne said.
In a statement issued on Wednesday, Liu said she “should have chosen her words better” in the interview that canvassed her views on China and in which she repeatedly refused to criticise the regime of Xi Jinping.

Liu, the first Chinese-born Australian MP, said she had cut ties with various Chinese institutions with links to the Communist party, and was conducting an audit to make sure no organisations had made her an honorary member without her knowledge.

A political storm has erupted over Liu’s links to the Chinese Communist party after the ABC reported that a Chinese government online record listed her name as a council member of the Guangdong provincial chapter of the China Overseas Exchange Association between 2003 and 2015.
The association was an arm of the Chinese government’s central political and administrative body, and has since been merged with the Communist party’s propaganda arm, the United Front Work Department.
In a Sky News interview with Andrew Bolt on Tuesday night aimed at hosing down the allegations, Liu said she could not recall if she was a member of the group and struggled to answer a series of questions about China’s activities in the South China Sea.
Defending the interview on Wednesday, Liu said she was a new member of parliament and would be “learning from this experience”.
“Australia’s longstanding position on the South China Sea is consistent and clear,” Liu said. 

“We do not take sides on competing territorial claims but we call on all claimants to resolve disputes peacefully and in accordance with international law.
“Our relationship with China is one of mutual benefit and underpinned by our Comprehensive Strategic Partnership. China is not a democracy and is run under an authoritarian system. We have always been and will continue to be clear-eyed about our political differences, but do so based on mutual respect, as two sovereign nations.”
In an attempt to clarify her membership of various Chinese organisations, Liu said she had been honorary president of the United Chinese Commerce Association of Australia, honorary president of the Australian Jiangmen General Commercial Association in 2016, and an honorary member of the Guangdong Overseas Exchange Association in 2011.
She said she no longer had links with the organisation, and pointed to similar links held by Jennifer Yang, the candidate preselected by Labor to run against her in Chisholm.
“I have resigned from many organisations and I am in the process of auditing any organisations who may have added me as a member without my knowledge or consent,” Liu said.
“Unfortunately some Chinese associations appoint people to honorary positions without their knowledge or permission. I do not wish my name to be used in any of these associations and I ask them to stop using my name.”

Labor was expected to target the government over Liu’s interview in parliament, comparing her remarks on the South China Sea to those made by the Labor senator Sam Dastyari, which ultimately led to his resignation from parliament.
Penny Wong, the party’s shadow foreign minister, said Liu’s suitability as an MP was now a “test for Scott Morrison”.
“There have been questions raised for some time about whether Liu is a fit and proper person to be in the Australian parliament,” Wong said.
“This is a test for Scott Morrison. He needs to come to the parliament, make a statement and assure the Australian parliament and through them the Australian people that Gladys Liu is a fit and proper person to be in the Australian parliament.
“I can recall the Liberal party making Sam Dastyari a test of Bill Shorten’s leadership; well, this is Scott Morrison’s test.”
Dastyari also weighed into the controversy, saying it was clear Liu needed to answer “some serious questions”.
“Her statement is shocking,” the former NSW senator said on Twitter. 

“She should be held to the same standard that I was – a standard the PM set. I resigned. I took responsibility. That was the right decision in my circumstances.”

Australia’s Prime Minister ‘Surprised’ by State’s Secret Deal With China

The state of Victoria signed on with China’s Belt and Road initiative at a time when intelligence officials are concerned about Beijing’s influence.
By Jamie Tarabay and Vicky Xiuzhong Xu
Australia's prime minister, Scott Morrison, said it was not “cooperative or helpful” for the state of Victoria to sign an agreement with China without his government’s knowledge. 

SYDNEY, Australia — Prime Minister Scott Morrison of Australia was blindsided by reports that a state government had quietly sidestepped federal regulators and signed a deal with China to participate in that country’s contentious Belt and Road infrastructure initiative.
Mr. Morrison said this week that the agreement, signed last month between the governments of China and the state of Victoria, undermined the federal government’s ability to conduct foreign policy at a time when intelligence officials are concerned that China is trying to exert undue influence in Australia.
Mr. Morrison told reporters he was “surprised” that the Victorian government would involve itself in a “matter of international relations” without discussing it first.
“They know full well our policy on those issues and I thought that was not a very cooperative or helpful way to do things on such issues,” Mr. Morrison said.
Daniel Andrews, the premier of Victoria, said the deal would bring his state’s businesses “one step closer to unlocking the trade and investment opportunities of China’s ambitious Belt and Road initiative.”
Australian Quisling: Victoria's premier, Daniel Andrews, center, said the agreement would lead to “trade and investment opportunities” for the state.

Critics, however, have characterized Andrews as naïve for failing to understand how China has used the initiative to deepen its global influence by promising to help construct grand infrastructure projects.
Others have said Andrews cut a deal with China for politically opportunistic reasons: His state government goes to the polls in less than two weeks.
Whatever his motivations, the deal sets a precedent for China to sidestep national leaders in Canberra and court states individually.
“I think this is a big part of Beijing’s agenda, to say to other states and territories that being the last to sign up will be bad,” said Michael Shoebridge, director of the defense and strategy program at the Australian Strategic Policy Institute, a think tank.
“That would be consistent with Beijing’s approach with other negotiations internationally.”
It remains unclear exactly what the deal in Victoria will cover, but the Belt and Road projects in other countries have tended to be large in scale.
Under Xi Jinping, China has pledged trillions of dollars over the past five years toward the construction of roads, power plants and ports throughout Asia, Africa and Europe.
The Belt and Road initiative, a key foreign policy of Xi’s government, uses big infrastructure projects as way to win friends and spread influence.

The Gwadar port in Pakistan, part of China’s ambitious Belt and Road infrastructure initiative, a debt trap for vulnerable countries.

But the money often comes with strings attached.
Chinese government-controlled lenders offer sizable amounts of money through loans or financial guarantees to build airports, seaports, highways, rail lines and power plants.
That money comes with the requirement that Chinese companies be heavily involved in planning and construction, and Chinese employees are brought in for the work, minimizing the immediate economic benefits to the country hosting the project.
Pakistan has accepted billions of dollars in loans from China in recent years for infrastructure projects, the terms of which remain largely undisclosed.
China has pledged a total of more than $60 billion to Pakistan in the form of loans and investments for roads, ports, power plants and industrial parks.
But now Pakistan is seeking an emergency bailout loan of $8 billion from the International Monetary Fund, along with new loans from Saudi Arabia and China.
Sri Lanka, in debt over a port that was never viable, renegotiated the terms of its contract with China to repay billions for the investment and ended up signing the port over to Beijing under a 99-year lease. 
The deal last December crystallized international criticism depicting the Belt and Road Initiative as a debt trap for vulnerable countries.

Chinese construction workers in Sri Lanka, another country that has hosted Belt and Road projects. In many cases, the use of imported Chinese labor has reduced the economic benefit for host countries.

Prime Minister Mahathir Mohamad of Malaysia recently canceled two major Chinese-linked projects, greenlighted by his since-ousted predecessor, that were worth more than $22 billion.
Australia has long had to balance its economic relationship with China against its strategic security alliance with the United States.
Ever since John Howard was prime minister more than a decade ago, Canberra has tried to keep both powers happy.
“Howard famously argued that Australia didn’t have to choose between its economic relations with China and the alliance with the United States,” said Michael Clarke, an associate professor at the National Security College at Australian National University.
“Clearly, both of those assumptions no longer hold with President Trump’s ‘America First’ approach and China’s assertiveness under Xi Jinping,” Mr. Clarke said.
The federal government, Mr. Clarke said, needs to clarify its position on whether Australian states are allowed to receive funding for Belt and Road projects.
Canberra may object to Victoria’s decision to sign on to the initiative, but the federal government has also signed a memorandum of understanding with China, which it, too, has kept largely under wraps.
In September, Steven Ciobo, then the trade minister, signed an agreement that would allow Australia and China to cooperate on infrastructure projects in third countries under the Belt and Road Initiative. The federal government has yet to make the details of that agreement public.
The Victorian government initially refused to divulge the contents of the deal it had signed with Beijing.
On Monday, however, it published a four-page document online.
“It says something about the culture of government and its distrust toward public transparency that both the federal and state governments chose not to disclose their MOUs,” said Euan Graham, a senior fellow at the Lowy Institute, a think tank.
“And there is a broader point here about how the government conducts its business.”
The reaction from other politicians — the opposition leader Bill Shorten has said he supports Victoria’s deal — and their attempts to use the news for partisan politicking have created even more fissures for China to exploit, Mr. Graham said.
“What the government needs to focus on is what’s good policy,” he said.
“Good policy toward China means a joined-up approach, and anything that allows those divides to be exposed is going to result in bad policy outcomes that China can at the very least rhetorically cash in on.”

Rogue Company

AUSTRALIA’S BAN ON HUAWEI IS JUST MORE BAD NEWS FOR CHINESE SPIES

By Kint Flinley

AS THE US-CHINA trade war rages on, two Chinese tech companies are facing a new headache: Australia’s government has joined the US in effectively banning its wireless carriers from buying gear for 5G networks from Huawei and ZTE.
The decision is more than spillover from the US-China dispute. 

It's part of a bigger controversy over the role of China in Australia, which is in the midst of political turmoil. 

On Friday, Prime Minister Malcolm Turnbull stepped down after lawmakers from his conservative Liberal Party voted to replace him with Scott Morrison, who had been treasurer and acting minister for home affairs.
News of the ban on Chinese 5G equipment came via a tweet from Huawei on Wednesday. 

A statement from Morrison, before he became prime minister, and Australian Senator Mitch Fifield confirmed that carriers may be restricted from buying equipment from companies operating in certain countries under new telecommunications regulations set to take effect in September, but the announcement doesn't mention Huawei, ZTE, or China by name. 

Instead it refers to "vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law.”
The news follows ongoing efforts to keep the two companies out of the US, purportedly over security concerns. 

ZTE briefly shut most of its operations in May after the US banned companies from selling it components. 

Talks this week between US and Chinese officials over the larger trade disputes failed to reach any agreement.
The US likely influenced Australia's decision, says Bates Gill, an expert on China and Asia-Pacific security issues at Macquarie University in Sydney. 

Australia is part of the "Five Eyes" intelligence alliance along with Canada, New Zealand, the UK, and the US, and it's a close trade partner with the US. 

"There is an inclination to follow the US on sensitive intelligence issues," says Gill.
But that's not the whole story. 

China and Australia have their own tense, complicated relationship. 

Nearly 30 percent of Australian exports last year were to China, according to a government report, and China and Hong Kong are among the largest foreign investors in Australia, according to another report.
In June, the Australian government passed two bills aimed at curbing foreign political influence by toughening espionage laws, banning covert activities on behalf of foreign governments, and requiring foreign lobbyists to register with the government. 

The bills didn't specifically name China, but earlier this year the Australian Broadcasting Company reported that the legislation was driven by a top secret government report that concluded that China had attempted to infiltrate multiple layers of the Australian government. 

Shortly after the bills were introduced last December, Australian Senator Sam Dastyari resigned over reports that he warned one of his Chinese-Australian donors that his phone might be tapped by the government.
Gill says this atmosphere of concern about Chinese influence, combined with the mood in the US, likely led to the decision to ban ZTE and Huawei from Australia's 5G networks. 

But he says it's a relatively small part of the current political drama unfolding in the country, and he doesn’t expect much fallout in either country.
Huawei is the largest maker of telecom equipment worldwide, and in Australia. 

But its Australian sales are a relatively small part of the larger economic relationship between the two countries, and China has historically been unwilling to open much of its own telecom markets to foreign companies. 

Gill says the decision marks another way that the relationship between the countries continues to "spiral downward."

In its statement, the Australian government said 5G networks, which are still in preliminary stages, pose new security issues. 

Ryan Kalember, senior vice president of cybersecurity strategy at security company Proofpoint, says a big difference between 5G networks and traditional 3G and 4G networks is that 5G network gear will be more dependent on powerful, flexible software, making security audits far more difficult. 

"That's a risk the Australian government thinks it can't mitigate," Kalember says.
Other US allies are trying to mitigate the risks. 

The UK still permits Huawei to sell gear to its carriers, and Huawei allows the government to inspect its code. 

But earlier this year, a report from UK security and intelligence experts downgraded the level of assurance they could provide the government that Huawei's products were safe to use, according to Reuters. 

A part of the report's concern stemmed from Huawei's dependence on components from other companies.
Similar concerns could have influenced Australia's decision. 

"It's hard to avoid the conclusion that the global supply chain is too complex to unwind at this point," Kalember says. 

"So you have to rely on these broad strokes, bans of products from entire countries."
We could see more of this soon. 

Last year President Donald Trump signed a defense spending bill that banned products from Russian security company Kaspersky in government. 

"These supply chain concerns could extend well beyond telco and antivirus to a whole host of other things as certain nations take more aggressive postures," Kalember says.