How China uses subnational diplomacy to exert influence over Australia

Associate Professor Salvatore Babones has released a new report at the Centre for Independent Studies entitled “A House Divided: The AFRB and China’s Subnational Diplomacy in Australia”, which explains how China uses subnational diplomacy to exert influence over Australia.

Below is the Executive Summary:

Australia is an open society awash in Chinese foreign influence operations, which at times may cross the lines to constitute foreign interference in Australia’s domestic politics. Some of the most nefarious of these operations take the form of ‘subnational diplomacy’: attempts by China to circumvent traditional international diplomacy by building relationships directly with Australian state, territory, and local governments and associated governmental entities (including state-chartered universities). On August 27, Prime Minister Scott Morrison announced that the government would introduce new legislation to restore Commonwealth control over Australia’s international relationships at all levels. In the ensuing press conference, he explained how his proposed Australia’s Foreign Relations Bill (AFRB) would help the Commonwealth keep tabs on subnational diplomacy that already involved “more than 130 agreements, from 30 countries”.

In fact, these represent only the tip of the iceberg of Australian governments’ subnational links to foreign governments, which range from grand programs like Victoria’s Belt and Road agreement with China to workaday commercial relationships like Hobart’s role as a logistics hub for Chinese Antarctic expeditions. This paper places Australia’s many subnational relationships with China in international perspective before focusing on Victoria’s highly controversial China diplomacy and other states’ and universities’ educational and scientific collaboration with China, including their support for university-based Confucius Institutes. Reviewing the fitness of the AFRB as a tool for countering Chinese influence and interference operations, the paper presents recommendations for improving its targeting and efficacy.

The Australian government draws a fuzzy line between ‘foreign influence’ and ‘foreign interference’, accepting the legitimacy of some influence operations (but not others) while consistently condemning political interference, which it defines as activities that are:

• carried out by, or on behalf of a foreign actor
• coercive, corrupting, deceptive, clandestine
• contrary to Australia’s sovereignty, values and national interests

It is not clear whether an action must tick one, several, or all of the items on this list to be considered foreign interference by the Australian government. Speaking in 2017 as prime minister, Malcolm Turnbull proclaimed that Australia “will not tolerate foreign influence activities that are in any way covert, coercive or corrupt. That is the line that separates legitimate influence from unacceptable interference”. The Attorney-General’s Department actually praises foreign influence operations that are “conducted in an open, lawful and transparent manner”, saying that they contribute to Australia’s “vibrant and robust democracy”. It takes a very narrow view of foreign interference as “covert, deceptive and coercive activities intended to affect an Australian political or governmental process”. Such a strict construction of the difference between influence and interference, while perhaps necessary for legal purposes, is rather less helpful as a guide to policy. Even when they are conducted in a lawful manner, China’s influence operations are never open or transparent, and it is doubtful that they ever contribute to a more “vibrant and robust democracy”.

This paper thus examines China’s subnational diplomacy as an attempt to exert influence over Australian politics and society, without attempting to make a legal distinction between influence and interference. The AFRB serves as a focal point for the exercise. The paper’s first recommendation is that the AFRB should be amended to require the publication of subnational government and government entity agreements with foreign entities, except in a limited number of cases when the filing party convincingly argues that secrecy is in the public interest. Allowing subnational governments and government entities to continue to do business in the dark is a recipe for ensuring they continue to be vulnerable to foreign influence and interference. The paper’s second recommendation is that the AFRB should be amended to establish a ‘trusted partners’ list of countries with which arrangements can be made without any need for ministerial approval. Such arrangements might still require registration, but they should not be tied up in uncertain and potentially time-consuming bureaucratic processes. Excessive regulation should also not be used as a blunt instrument that prevents universities from cooperating internationally.

In principle, the AFRB is all about protecting Australian sovereignty, without prejudice to any particular foreign country. In practice, as nearly every commentator has recognised, the AFRB is ‘all about China’. For Australia, China is too important to ignore but too dangerous for complacency. Australia has no choice but to deal with China, but it must do so with its eyes open, and its values intact.

The paper includes a detailed examination of the Victorian Government’s deplorable ‘Belt and Road’ agreement with China. It also analyses the 13 CCP-run Confucius Institutes operating at Australian universities.

The full paper can be downloaded here.

Unconventional Economist
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  1. Don’t the CCP still have an agent in Australia’s federal Senate ?? what a doozy #GladysLiu

    Is Scomo still turning a blind eye to that, for real?

  2. So some countries will be on the low bureaucracy list. No shell companies exist in the real world then. No shielding trusts. Some of this is actually hard and needs more than a half-hearted wave.

  3. This approach reflects a warfare strategy used by Mao called “using the countryside to surround the city.”
    In the Australian case the ‘countryside’ are the states/universities and the ‘city’ is the federal government.

  4. The corrupting influence does not come from the Confucius Institutes. It comes from the Chinese real estate developers and their political donations.

  5. This article is a good example of the current anti China narrative. Heroes and villains are included for the excitable. It is worthwhile to read Greg McCarthy’s recent article in East Asia Forum (www.east Asia’s-China-policy/ ) on a similar subject to maintain a bit of balance.

  6. I’m not sure anyone accepts the proposition that this paper represents an example, good or otherwise, of “the current anti-china narrative”. Naivety isn’t balanced.