Australia’s top spy on Chinese tech and Canberra’s key infrastructure

A
train is pictured at Flinders Street Station on September 4, 2015
in Melbourne, Australia.
Michael
Dodge/Getty Images

• Australia’s chief spy says Chinese telecoms are a
  threat to critical infrastructure and that’s why they were
  banned from Canberra’s growing 5G network.
• That news may not come as a surprise to China, but the
  Ministry of Commerce and the Global Times expressed some shock,
  confusion, and hurt this week.
• The problem China faces is this: it has built an
  incredibly elaborate and successful technocracy with
  state-embedded digital brands like WeChat,
  but uses them to help monitor its own population. Those efforts
  are likely to make it difficult for China to gain the trust of
  other countries.

The top spy in Australia has explained why Huawei
and ZTE have
been barred from the country’s 5G network and China is
unimpressed.

Mike Burgess, the director-general of the Australian
Signals Directorate, said in Canberra on Monday that the ban on
Chinese telecom firms like Huawei Technologies and ZTE was in
Australia’s national interest and would protect the country’s
critical infrastructure.

It is the first time the nation’s chief spy has publicly
explained the move since August when Australia made the
call  to block the Chinese telecom giants from supplying
equipment to the nascent Australian 5G network.

Burgess said that the stakes “could not be higher” and that if
Australia used “high-risk vendor” supplies then
everything from the country’s water supply and
electricity grid to its health systems and even its autonomous
and semi-autonomous vehicles would be compromised.

In response, a miffed, but totally unsurprised China on
Tuesday again called on Australia to drop “ideological prejudice”
and “create a level playing field for Chinese companies doing
business in the country.”

Australia is a member of the so-called “Five Eyes”
intelligence-sharing alliance alongside Canada, New Zealand, the
UK, and the US, and while Australia is also a close trading
partner, there is certainly an understanding to follow the US on
sensitive intelligence issues that can compromise the
alliance.

So that obviously puts the kibosh on allowing any access to
critical infrastructure for any companies aligned with the
Chinese state.

And since the Chinese government has been leveraging the
state’s position, role and function within its growing portfolio
of world-beating mega-tech companies, the decision out of
Canberra to err on the side of caution — and  Washington —
would have surprised precisely no one.

But that didn’t stop China from responding the way it
did.

In a restrained retort from the English language tabloid,
The Global
Times, China accused Canberra of being part of a US-led
global conspiracy to leave Chinese tech companies
behind. 

“Australian officials and think tanks in recent days
continued to raise security concerns over Chinese companies’
operations in the country and have made accusations about China
stealing its technologies, in what Chinese analysts say is an
attempt to, in collaboration with other Western powers, derail
China’s steady rise in telecom and other technologies,” the
Global Times noted. 

Foreign Ministry spokesman Lu Kang said at a press briefing
on Tuesday, that “the Australian side should facilitate the
cooperation among companies from the two countries, instead of
using various excuses to artificially set up obstacles and adopt
discriminatory practices.”

Read more:

China has started ranking citizens with a creepy ‘social credit’
system — here’s what you can do wrong, and the embarrassing,
demeaning ways they can punish you

Back in August Marise
Payne, the Australian foreign affairs minister, said the move
was not targeted specifically at Huawei and ZTE, but applied to
any company that had obligations clashing with Australia’s
national security.

In response, China’s
Ministry of Commerce released a statement chilling in its
brevity: “The Australian government has made the wrong decision
and it will have a negative impact to the business interests of
China and Australia companies.”

China is Australia’s largest trading partner and 30% of
Australian exports end up in the Middle Kingdom, it’s a bit of a
fraught relationship when the US is also the isolated Pacific
nation’s most important and closest military ally. 

Huawei is the largest maker of telecom equipment worldwide,
and in Australia for that matter too. But its sales here are
still a fraction of the broader economic ties between the two
countries, and it is China that has historically been unwilling
to open much of its own telecom markets to foreign
companies.

Describing Australia’s ban on Chinese telecommunication
companies as “discriminatory” and based on manufactured
“excuses,” China on Tuesday called on Australia to drop its
“ideological prejudice” and “create a level playing field for
Chinese companies doing business in the country.”

In the annals of
majestic propaganda, it’s low-key bluster coming as it does
from the world’s first digital dictatorship, as Business Insider
UK’s Alexandra
Ma describes here.

It’s just that not getting your tech-giants invited to
global infrastructure parties is one of the unforeseen costs of
setting up the greatest, most powerful intelligence-collection
systems ever devised.

That success makes it hard for the Chinese government and its
state-owned media to credibly look surprised, hurt, or bewildered
when such a decision is made.

Read more:

Australia’s former foreign minister let slip how casually easy it
is for China to tell another country what to do

China’s vast data-collection platforms — WeChat alone has more
than a billion users — are harvesting ever-deeper and more
granular material on behalf of the state.

That’s great news for China’s state machinery when it comes to
monitoring the population, but it’s a double-edged sword too, and
wielding it has its price.

According to Danielle Cave, a senior analyst at the Australian
Security Policy Institute’s International Cyber Policy Centre,
requiring Chinese citizens, organisations and companies to
support, cooperate with and collaborate in intelligence
activities, of course, comes at a cost to China.

“And that cost will be the international expansion plans of
Chinese companies—state-owned and private— which have been well
and truly boxed into a corner.

“The CCP has made it virtually impossible for Chinese companies
to expand without attracting understandable and legitimate
suspicion. The suspicion will be deeper in countries that invest
in countering foreign interference and intelligence activities,
Cave wrote earlier this year in The Strategist.

Most developed countries, including Australia, fall into that
group and will come to fear the potential application and reach
of China’s technical successes. 

But then again, there are a good few states out there that could
be willing to risk being watched by China, if they can use
China’s tech to watch their own populations.

For now the Global Times insists that “such accusations are
baseless.”

“They are in line with the Australian government’s overall
approach toward China — a tougher approach that (is) derived from
suspicion about China rise’s (sp) that they perceive as threat, a
fantasy to contain China’s further development and ideological
prejudice against China.”

It might be infuriating, but taken from this perspective it
is a mark of sheer awe and respect for China’s technocratic
achievements that Australia has balked at letting Huawei loose
inside its critical networks.