China steps up efforts to steal Australian company secrets

• China directed an increase in cyber attacks on Australian companies this year that breached a bilateral agreement between the two countries to not steal each other's commercial secrets.
• An investigation by Fairfax Media and broadcaster Nine News found that China's Ministry of State Security was responsible for the so-called "Operation Cloud Hopper."
• It was a wave of attacks that were detected by Australia and its partners in the "Five Eyes" intelligence sharing alliance — the U.S., U.K., New Zealand and Canada.

By Saheli Roy Choudhury

China directed an increase in cyber attacks on Australian companies this year that breached a bilateral agreement between the two countries pledging not to steal each other's commercial secrets, the Sydney Morning Herald reported Tuesday.
An investigation by Australian broadcaster Nine News and Fairfax Media — which owns the Sydney Morning Herald — found that China's Ministry of State Security was responsible for the so-called "Operation Cloud Hopper." 

It was a wave of attacks that were detected by Australia and its partners in the "Five Eyes" intelligence sharing alliance — which is made up of the U.S., U.K., New Zealand and Canada.
A senior Australian government source told the Sydney Morning Herald that China's activity was a "constant, significant effort" to steal intellectual property. 

Others said local companies and universities were not doing enough to tighten their cybersecurity against such attacks, the newspaper reported.
Cybersecurity experts also told the newspaper they had noticed "a significant increase in attacks in the first six months of this year" and that the activity was "mainly from China."
Relevant contact details for China's Ministry of State Security were not immediately available.
The Sydney Morning Herald's report came after recent remarks from U.S. Vice President Mike Pence, who accused Beijing of intellectual property theft during the Asia Pacific Economic Cooperation Summit.
Western countries have long accused China of stealing intellectual property as well as commercial and military secrets.

In recent years, China has stepped up efforts to create sophisticated home-grown technologies as it aims to catch up with other high-tech countries like the U.S. and Germany.
In 2015, Chinese dictator Xi Jinping struck an agreement with former President Barack Obama to curb cyber espionage. 

However, a U.S. intelligence official said earlier this month that China was violating the agreement.

The Sinicization of New Zealand

How China is Buying New Zealand with Campaign Contributions
By Charlotte Graham-McLay

Jami Lee Ross, a National lawmaker, accused the party’s leader of trying to disguise a donation of 100,000 New Zealand dollars as smaller anonymous donations.

WELLINGTON, New Zealand — The two politicians started their conversation casually, but there was serious business at hand: a "donation" recently deposited into a party account from a Chinese businessman, which totaled 100,000 New Zealand dollars.
The reported size of the donation, about $66,000, was large by New Zealand standards. 

But the cash, the lawmaker says, came with strings attached — a promise to add the names of two Chinese businessmen to a list of candidates for Parliament — and a plan to disguise the identity of the Chinese donor, a man with deep pockets and well-documented connections to the Chinese Communist Party.
The conversation, a recording of which was leaked last week, is the latest in a series of scandals that suggest New Zealand is vulnerable to political interference at a time when China is seeking greater influence throughout the Pacific.
New Zealand is often portrayed as a progressive paradise far removed from the rest of the world, but it plays an important role in the Five Eyes network, an alliance of Western intelligence agencies assigned to listen in on communications worldwide. 

Jian Yang, the most famous Chinese mole in a Western country

Similar concerns were raised last year when it was revealed that Jian Yang, a Chinese lawmaker and member of the National Party, had taught at a Chinese spy academy. 

Yang denied being a spy and remains in Parliament.
Analysts and allies fear that China can buy influence on the cheap and without raising alarms in New Zealand’s political system, which has weak rules about lobbying, by channeling money through small, anonymous donations.
Political donations, said Miguel Martin, a commentator who writes about China under the pseudonym Jichang Lulu, are an expedient way for the Communist Party to acquire “an avenue of influence on that country’s policy.”
Politicians at the local and national levels and from every party are desperate for funding, and therefore potentially easy prey.
“There’s kind of a ‘let the good times roll’ aspect with politicians in New Zealand, where historically money has been hard to come by and parties — by global standards — don’t have much of a budget at all,” said Rodney Jones, a New Zealand economist based in Beijing.
While contributions made directly from foreigners could raise red flags, Mr. Jones said, donations from wealthy, Chinese-born New Zealanders with connections to the Chinese Communist Party are delivered to politicians “on a platter.” 

It is in the politicians’ self-interest not to ask any too many questions about where the money originated.
The conversation leaked last week between the leader of New Zealand’s largest opposition party and a once-trusted lawmaker has prompted a national discussion about whether New Zealand should tighten its campaign finance rules, or introduce a registry of lobbyists like those in the United States and Australia.

Beijing stooge Simon Bridges, leader of the country’s largest opposition party

Jami Lee Ross, a member of the center-right National Party, accused the party’s leader, Simon Bridges, of fraud by trying to disguise a 100,000 New Zealand dollar donation as smaller, anonymous donations.
By law, the identities of contributors who donate less than 15,000 New Zealand dollars are allowed to remain anonymous.
Mr. Ross turned over to the police, and made public online, a phone call he had secretly taped with Bridges in June, in which the pair discussed a "donation" from the businessman, Yikun Zhang. 

Simon Bridges and his Chinese case officer, businessman Yikun Zhang.

The recording did not contain clear evidence that Bridges had asked for the "donation" to be broken up, and Bridges has denied doing so. 

The police are investigating whether the National Party failed to declare a donation from Zhang.
The National Party has said it did nothing illegal, but has yet to explain how the donation discussed in the call was handled.
The mention of Zhang piqued the interest of China analysts, who said the businessman had known ties to the Chinese Communist Party.
Zhang served in the People’s Liberation Army and headed a provincial consultative group for the Communist Party before emigrating to New Zealand in 2000. 

His “entire life is in the shadow of the Communist Party,” said Chen Weijian, a member of the pro-democracy group New Zealand Values Alliance.
Zhang is chairman of the influential Chao Shan General Association of New Zealand, an organization started in 2014 for New Zealanders born in the Chinese town of Chaoshan, but which has become an important intermediary between China and New Zealand. 

He plans to host 1,000 Chinese visitors at a business conference next year in Auckland, the country’s largest city.
Zhang’s “positions and relationships” gave the Chinese Communist Party “leverage enabling it to ‘guide’ or simply expect individuals like Zhang to be aligned with the CCP’s policy goals,” said Mr. Martin.
Zhang has appeared in news photographs with both opposition lawmakers and those in the government, including Prime Minister Jacinda Ardern.

Chinese businessman Yikun Zhang with his intimate friend Jacinda Ardern

Ardern this week defended the electoral donation system, and said the country’s politics free from Chinese interference.
Zhang has also attended a fund-raising auction for Phil Goff, the mayor of Auckland, and is currently traveling in China with another New Zealand mayor.

Prime Minister Jacinda Ardern, center, and Mayor Phil Goff of Auckland, right, at a rally in September. Both politicians have links to Yikun Zhang, a wealthy businessman.

It is Zhang’s second trip to China with that Chinese mayor, Gary Tong of Southland.
Representatives for both the Labour and National parties did not respond to questions about whether they intended to investigate the foreign political connections of their donors, and the law does not require them to do so.
While politicians cannot accept large donations from foreigners, analysts said lawmakers should be more savvy about where their money comes from.
Anne-Marie Brady, a Canterbury University professor who published a paper about what she called China’s global blueprint for influencing Western democracies, told Radio New Zealand that the government should consider reforming rules around electoral finance, conflicts of interests, and “whether it’s O.K. to be a member of a New Zealand political party and a foreign political party.”
(The New Zealand police and Interpol are investigating a burglary of Ms. Brady’s home in February, which she believes was carried out by agents linked to Beijing.)
In the leaked recording between the two lawmakers, Mr. Ross reminds Bridges that he had also discussed with Zhang a potential political “candidacy” for two of his New Zealand-Chinese business associates. 

In New Zealand, some lawmakers campaign for seats representing a local constituency, while others are selected for Parliament by their political parties, and do not have to run for office.
“Two MPs, yeah,” Bridges can be heard responding, in a reference to members of Parliament. 

Bridges said last week that he had not been promising candidates for cash.
China is New Zealand’s biggest trading partner and New Zealand is hoping to expand a free-trade agreement signed in 2008.
New Zealand is not the only country wrestling with issues of China’s reach. 

Australia in June approved a sweeping national security law that, among other things, requires foreign lobbyists to register on a public list. 

New Zealand, on the other hand, does not require domestic or foreign lobbyists to register.
Australia’s law was prompted by revelations that two businessmen of Chinese descent had donated millions across the political spectrum.
Mr. Ross, the lawmaker who released the recorded call, both resigned and was expelled from the National party last Tuesday, but maintained on Friday that he would remain in Parliament as New Zealand’s only independent lawmaker.

How the West Is Losing New Zealand to China

Chinese interference in New Zealand at critical stage, says Canada spy report

By Eleanor Ainge Roy

The Chinese Reichskommissar and the Quisling: New Zealand’s business and political elite had all been targeted by China’s Communist party.

A report released by Canada’s spy agency has warned that New Zealand, one of its closest allies, has been influenced at every level of society by the Chinese government, and that the situation has reached a “critical” stage.
The report states that New Zealand is viewed as “the soft underbelly” of its western big brothers such as the UK and US.

New Zealand's Five Eyes membership called into question over 'China links'

“Xi Jinping is driving a multi-dimensional strategy to lift China to global dominance,” it stated, and New Zealand was a key pawn in its strategy, with the government regarding its relations with the island nation as “an exemplar” of how it would like to steer future relations with other states.
The report was published by the Canadian Security Intelligence Service (CSIS) and was based on reports to CSIS during an academic workshop.
The report claimed New Zealand’s business, political and intellectual elite had all been targeted by the Chinese Communist party, and that business tie-ups with companies, universities and research centres had been used to “influence activities and to provide access to military technology, commercial secrets and other strategic information”.
“Massive efforts” had also been made to bring Chinese-language media and Chinese community groups under the party’s control, and political donations have been made, it said.
“New Zealand provides a vivid case study of China’s willingness to use economic ties to interfere with the political life of a partner country,” the report stated, warning that smaller states were “particularly vulnerable” to Chinese influence. 

New Zealand is home to just 4.7 million people.
“An aggressive strategy has sought to influence political decision-making, pursue unfair advantages in trade and business, suppress criticism of China, facilitate espionage opportunities, and influence overseas Chinese communities.”
New Zealand appealed to China as a strategic ally for numerous reasons, the report said. 

New Zealand administers the defence and foreign affairs of the neighbouring Pacific Island territories of Niue, Tokelau, and the Cook Islands, which means “four potential votes for China at international forums”.
Legislative change in 2011 has also made New Zealand “a hotspot for global money laundering”, a reputation shared by its territories, and the country is also a claimant in Antarctica and geographically one of the closest countries to it.
New Zealand has “cheap arable land and a sparse population”, a thriving dairy sector in which China is the largest foreign investor, a burgeoning space programme allowing rockets to be launched from the Mahia peninsula, unexplored petroleum reserves as well as expertise in multilateral trade negotiations, Pacific affairs, Antarctic science, and horticultural science which is “useful” for China.
The country’s membership of the Five Eyes (an intelligence sharing network between Australia, the US, England, Canada and New Zealand) as well as Nato and other important military partnerships is also appealing.
“New Zealand’s economic, political and military relationship with the PRC [People’s Republic of China] is seen by Beijing as a model for relations with Australia, the small island nations in the south Pacific, and more broadly other western states” the report said.
“Some of these activities endanger New Zealand’s national security directly, while others have a more long-term corrosive effect.”
New Zealand’s prime minister, Jacinda Ardern, said New Zealand had a “very strong” relationship with Canada, particularly with its prime minister, Justin Trudeau. 

Last week, New Zealand’s foreign affairs minister travelled to China for a three-day visit, and met “high-ranking Chinese officials” including foreign minister Wang Yi, Politburo member and former minister of foreign affairs Yang Jiechi and the head of the Communist party’s international department, Song Tao.
“Our discussions were wide-ranging, covering all aspects of our bilateral relationship,” said Peters in a statement, including expansion of trade and economic ties, upcoming FTA discussions, and peace and security in the Asia-Pacific.