Australia and New Zealand: Be Wary of Subversive Chinese Influence

It is no secret that China has long had regional ambitions in the Indo-Pacific. The concern for the last 15 years, however, has been the country’s rise in influence in Australia and New Zealand. Specifically, countries in the West are concerned about China’s ability to infiltrate all levels of government in both, as the Oceanian countries are part of the Five Eyes intelligence alliance. This agreement is defined by nearly unfettered intelligence sharing among the United States, the United Kingdom, Canada, Australia, and New Zealand. The English-speaking countries have long worked together on matters of counter-terrorism, cyber security, and illicit finance. The alliance, however, depends on the individual countries’ ability to combat and deter foreign interference. Unfortunately, it seems increasingly clear that both Australia and New Zealand are witnessing exterior influence from China. While China has certainly influenced the three other members of the UKUSA Agreement, Australia and New Zealand are most at risk because of their geographic proximity to China and strategic importance in the Indo-Pacific. As China continues to grow its international presence, Five Eyes members need to take a hard look at their security mechanisms, transparency, and vision for the coming decades.

It has been previously documented that China stands to gain from Western intelligence. In the past, China has stolen intellectual property secrets from Five Eyes countries in technology, cyber security, and weapons systems. These breaches allow the country to grow and mature at faster rates than would otherwise be possible. Therefore, Australia and New Zealand must be wary of Chinese overtures in the form of political or economic deals. While it is of course beneficial for countries to engage with China economically on a host of issues, these same countries should have measures in place to monitor what Chinese companies, which often have close relations to their government, are gaining access to. Politically, the ramifications of Chinese influence can be far-reaching. Recently, New Zealand chose not to sign the alliance’s statement on the imposition of the security law on Hong Kong (NZ Herald). While the country did ultimately issue a statement about its “deep concern” with the law, its decision not to join the four other countries might indicate that China pressured the country not to do so. David Mahon, executive chair of Mahon China Investment Management, may have put it best: “For New Zealand not to have signed this shows thoughtful restraint”. The restraint could be referring to the anticipation of China’s reaction if New Zealand had signed the statement. Prime Minister Arden and her advisers may have hedged their bets regarding the fallout from signing the agreement versus issuing a weaker statement on their own and came to the conclusion to act independently. At a time when China is increasing its diplomatic and political sway on nearby countries regarding a host of issues, including Taiwan and Hong Kong, this unilateral act should be worrisome to the Five Eyes alliance.

Some members of the United States intelligence community have argued that New Zealand should be removed from the alliance (Business Insider). Peter Mattis, a former CIA China expert testified to the US-China Economic and Security Review and argued that the Chinese Communist Party’s (CCP) influence had reached New Zealand’s “political core”. One example he gave concerned the current Prime Minister’s party funding: it received finances from United Front, Beijing’s overseas influence arm. Furthermore, he cited intimidation attacks China allegedly used on New Zealand citizens. For instance, Anne-Marie Brady, an academic who was researching the United Front’s actions, had her house broken into, resulting in a stolen computer and  flash drive. She subsequently received a warning letter threatening “push back” against those opposing China. Mattis went on to contrast New Zealand’s feeble reaction to that of Australia, which commissioned a secret government study that uncovered the CCP’s incursion into all levels of politics. Furthermore, Australia passed key legislation pertaining to espionage and foreign interference (Köllner). If New Zealand is to regain the trust of the other Five Eyes countries, it must demonstrate that it is willing to confront China’s “magic weapons”, consisting of the Communist Party’s foreign influence operations, head-on (NPR). Such change will undoubtedly be difficult to implement: New Zealand’s two-way trade with China has increased more than three-fold in the past decade, climbing from $8.6 billion in 2007 to $26.1 billion in December 2017 (Stats NZ). As stated previously, there are inherent benefits to trading goods and services with China; the key is to ensure that the sectors engaged in this trade do not become vulnerable to Chinese exploitation or manipulation. New Zealand must demonstrate a faithful effort in curbing China’s intelligence gains in the technology and telecommunications sectors, among others.

While Australia may have passed legislation countering foreign espionage, it is certainly not out of the waters yet. A survey compiled with United Nations databases found that Australia is the most dependent on China among the Five Eyes alliance (Sydney Morning Herald). Specifically, the country depends the most on China for strategic goods, referring to items critical to a sector’s operation, rendering operations unfeasible if they were to be withdrawn. Indeed, 27.6% of Australia’s total imports are deemed critical. This ratio increases China’s pressure capabilities on Australia, as the Five Eyes member is most likely less able to withstand a halt in shipments than China is willing to withstand a drop in exports. Most worryingly, 94% of laptops and three-quarters of Australia's smartphones are from China. This reality also endangers Australia’s national security capabilities, as their intelligence agencies rely on these technologies. Therefore, Australia is in a critical position with regard to procurement for its economy. More broadly, as of 2017, China had $6.3 billion invested in rail, property, gas, and coal in Australia, sectors critical to the health of the Five Eyes member (NPR). Furthermore, reports have indicated that up to 40 former and current Australian politicians have been doing the Chinese government’s bidding, some unwittingly. Australia is, in many ways, in the same predicament as New Zealand and will need to continue its push to curb ill-intentioned Chinese political influence.

The positive news is that the Five Eyes Alliance has taken note of the threat that the CCP poses to its intelligence sharing capabilities and strength. This explains why back in 2018, the alliance was suspected of deepening coordination on foreign interference signaling (Reuters). The organization seems to have also included Germany, Japan, and, to a lesser degree, France in its efforts to limit China’s subversive tactics. Finally, international coordination has accelerated to curb Chinese investments in sensitive technology companies. Most recently, the United States has been pressuring the UK not to sign a comprehensive 5G deal with China’s Huawei due to security concerns, and this pressure on other members will likely continue. The anti-China coalition will become increasingly salient in the coming years as China perfects its statecraft and spy capabilities. As the adage goes, a team is only as strong as its weakest link. Given that the Five Eyes value transparency, security and political deficiencies endanger not just Australia and New Zealand, but the United States, Canada, and the UK as well. Therefore, the Five Eyes should look to aid the Tasman neighbors to counter Chinese influence. The decision will certainly be difficult and may involve building new trade partnerships for specific technologies, but the alternative is just as concerning. This critical alliance must act soon to prevent China from gaining a definitive edge in the Indo-Pacific.

Works Cited:

1. Howard, Rebecca. (2020, May 29). NZ didn’t join ‘Five Eyes’ in statement on Hong Kong. NZ Herald. Accessed June 8 on https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12335917

2. Cha, Tara Francis. (2018, May 29). China’s communist party has so much power in New Zealand that western countries might stop sharing intelligence. Business Insider. Accessed June 8 on https://www.businessinsider.com/new-zealand-should-be-cut-from-five-eyes-over-china-influence-2018-5

3. Köllner, Patrick. (2019, November 7). Australia and New Zealand recalibrate their China policies: convergence and divergence. The Pacific Review. Accessed June 8 on https://www.tandfonline.com/doi/full/10.1080/09512748.2019.1683598

4. Schmitz, Rob. (2018, October 2). Australia and New Zealand Are Ground Zero for Chinese Influence. NPR. Accessed June 8 on https://www.npr.org/2018/10/02/627249909/australia-and-new-zealand-are-ground-zero-for-chinese-influence

5. Weir, James. (2018, March 1). New Zealand’s two-way trade with China more than triples over the decade. Stats NZ. Accessed June 8 on https://www.stats.govt.nz/news/new-zealands-two-way-trade-with-china-more-than-triples-over-the-decade

6. Bourke, Latika. (2020, May 15). ‘Greatest peril’: study finds Australia most dependent on China among the Five Eyes. The Sydney Morning Herald. Accessed June 8 on https://www.smh.com.au/world/north-america/greatest-peril-study-finds-australia-most-dependent-on-china-among-the-five-eyes-20200514-p54ssg.html

7. Barkin, Noah. (2018, October 12). Exclusive: Five Eyes intelligence alliance builds coalition to counter China. Reuters. Accessed June 8 on https://www.reuters.com/article/us-china-fiveeyes/exclusive-five-eyes-intelligence-alliance-builds-coalition-to-counter-china-idUSKCN1MM0GH