April 12th 2008

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Articles from this issue:

COVER STORY: Red Star over Canberra

EDITORIAL: Behind the bid for UN Security Council seat

CANBERRA OBSERVED: Kevin Rudd's ideas summit looms

BIOFUELS: Ethanol doesn't have to compete with food

QUARANTINE: AQIS blamed for equine influenza outbreak

FINANCE: Right and wrong way to tackle financial crisis

STRAWS IN THE WIND: The American elections / Rudd's honesty / Conservative blues / NATO's fastidious peace-keeping

TAIWAN: KMT victory paves way for improved China ties

EUROPE: The Dutch disease - how low can you go?

BIOETHICS: Man - a vanishing species?

OPINION: Twilight of the British Raj

AS THE WORLD TURNS: Beijing's one-child policy a demographic powder-keg / A nation of dunces? / Fragility of the affluent society

High cost of foregoing trade deal (letter)

Finlandisation? (letter)

News Weekly's stand on global-warming (letter)

Earth Hour a silly idea (letter)

BOOKS: THE LITERACY WARS: teaching children to read and write in Australia by Ilana Snyder

BOOKS: ORIGINS: An Atlas of Human Migration edited by Russell King

Books promotion page

Red Star over Canberra

by Joseph Poprzeczny

News Weekly, April 12, 2008
Both Labor and the Coalition are at serious risk of being manipulated by China to further its geostrategic and political ambitions, warns Joseph Poprzeczny.

Chinese-born Professor Dong Li suggests that Prime Minister Kevin Rudd should be reminded of a common Chinese saying: "Chi renjia de, zui ruan; na renjia de, shou duan. -If you eat other people's food, your mouth will be soft; if you take their gifts, your arm will be shortened." In other words, if you have received benefits from somebody, you can never be as firm and principled as you should in dealing with the person.

Professor Li, who migrated to the West from China 22 years ago and currently teaches at New Zealand's Massey University, has often publicly spoken out against the Chinese Communist Party's misrule of China, particularly against its brutal 1989 suppression of the pro-democracy Tiananmen Square protest.

Kevin Rudd's recently reported moonlighting and junketeering, when he was a Labor frontbencher, on behalf of wealthy favoured Chinese is the tip of a large Beijing-based network that's employing some of Australia's best informed political and diplomatic figures and even former intelligence officers.


Two years ago, former Office of National Assessment (ONA) intelligence analyst, Dr Andrew Campbell, published an assessment of the Chinese tactic of employing such Australians. His article, "Guanxi and Australia-China consultants - the risk of dual allegiance", appeared in the quarterly journal National Observer (no. 68, Autumn 2006).

In it he highlights former prime ministers, Bob Hawke and Paul Keating, and Australia's first ambassador to communist China, Professor Stephen FitzGerald, and also mentions several former key figures in ASIO and ONA.

It must be said, however, that none of those named are seen as unpatriotic or treasonous. Campbell simply uses them to illustrate the fact that growing numbers of Australian MPs, former intelligence officers, public servants and ambassadors are working as consultants for foreigners, including foreign governments.

"Australian consultants to China bring the benefit of language skills, experience in dealing with China and particularly the benefits of access to Australian and allied intelligence on China," Campbell says.

"In Chinese this is known as guanxi, or 'personal contacts networks'. Guanxi... literally means 'connections'. The Chinese leadership highly values relationships with friendly, retired foreign political leaders as they represent the highest level of guanxi.

"Australian consultants' visits to China are intensively monitored by Chinese security authorities, and provide a benign operational environment for possible compromise and recruitment."

Campbell asks what can be done legislatively to reduce such risks at Australia's end. (Although he focuses upon China, his recommendations are as pertinent in relation to the increasingly petro-dollar-flush Islamist Iran and proselytising Wahabbiist Saudi Arabia).

Hawke, former ACTU president and PM, has an advisory firm, Bob Hawke and Associates. In his biography he said that, after leaving office in 1992, he was contacted by China's government. He recalled: "I accepted the invitation and was welcomed in Beijing by President Jiang Zemin who is also [Communist] Party Secretary and Chairman of Military Commission."

In 1998 AMP, in a bid to enter the Chinese market, used Hawke "to assist in their negotiations at a political level".

In November 2001 the Australian Financial Review's Hong Kong correspondent reported on China's economic expansion, noting: "One person enjoying the fruits of these unique changes will be ... Bob Hawke, when he's not playing a round of golf on one of Beijing's many courses or betting on the Guangzhou races." (AFR, November 19, 2001). Ziwang Hu, managing director of Goldman Sachs Greater China, reportedly said of Hawke: "He's doing well here. I've even seen him carrying around that golf bag in Peking (sic)."

Campbell sees Hawke's successor as PM, Paul Keating, as "the most discreet of the Australian consultants". "Nobody but I knows how my business life is," Keating is quoted as saying. "Not even business acquaintances of mine, because like most things, I keep my affairs to myself."

In January 1998, Colonial Insurance disclosed that Keating advised it on "long-term strategy in Asian markets". (The same month, Hawke was in China for Colonial's competitor, National Mutual Insurance).

Onetime ANU academic, Professor Stephen FitzGerald - appointed by Whitlam in 1973 as Australia's first ambassador to communist China - has, since 1978, "run a consultancy for Australian companies in Asia, particularly China".

Campbell refers to the professor's repeated expressions of "acceptance that China's future strategic and regional hegemony [across Asia] was inevitable". Campbell quotes him as saying: "That future will not be one in which the United States, or any other power with which we have shared cultural heritage or political philosophies or processes or institutions, is the determining force in the part of the world in which we live."

However, as Campbell points out, the professor's "benign assessment of Chinese regional hegemony... is not shared by the US, Taiwan or Japan, who watch with apprehension as China introduces the new generation of mobile nuclear missiles... [that] could target Australia in an arc from Brisbane to Perth".

The high-level involvement with Beijing by Australians who once had access to the highest levels of intelligence and other information prompts Campbell to urge the adoption of a mandatory Australian Foreign Agents Registration Act (AFARA). Such an act, he says, should be drafted to legally deter former Australian government ministers and officials, diplomats and senior intelligence officers from "wittingly or unwittingly betraying or disclosing secrets or compromising Australia's national security interests".

It would, among other things, "forbid former Australian intelligence officers, diplomats and analysts from being employed as consultants for a period of at least three years after the termination of their employment with the Australian government". Although "ministerial codes on post-separation employment are common to many Western governments", to date Australia has resisted adopting them.

Operational ruthlessness

Campbell's prescient article concludes with a section entitled "The dual allegiance dilemma". He says: "The Chinese intelligence services are noted for their operational ruthlessness and could be driven to demand guidance and expertise from their Australian consultants or agents.... Over the past decade, a wave of Chinese defectors to Australia, Canada, Belgium and the USA have revealed Beijing's aggressive intelligence-collection and counter-intelligence operations."

Campbell says this is likely to be a growing rather than diminishing phenomenon in future, and footnotes an earlier article by Richard Bullivant, "Chinese defectors reveal Chinese strategy and agents in Australia" (National Observer (no. 66, Spring 2005).

Campbell concludes: "The risk of dual allegiance is a national and international security challenge which the Australian Government, in consultation with the US Administration, must counter by a mandatory AFARA."

Sydney columnist, Piers Akerman, says: "Labor - particularly the NSW ALP - has accepted hundreds of thousands of dollars from Chinese companies, including AustChina", for which Rudd has moonlighted (Sydney Daily Telegraph, March 19, 2008). This has ominous echoes of Gough Whitlam in 1975 seeking $US500,000 from Iraq's Ba'ath regime to fund Labor's election campaign (Melbourne Age, November 15, 2005).

In Rudd's defence, at least it can be said that when he was Opposition foreign affairs spokesman he did take the trouble to read the Kilgour-Matas report investigating the allegations that the Chinese Government had executed thousands of Falun Gong dissidents and then harvested their organs for transplants. He admitted he was "deeply disturbed by it", and wrote to the Department of Foreign Affairs pledging his support for a full inquiry into these claims. (Lateline, ABC television, August 17, 2006).

And the Liberals' own dealings with China when they were in government are nothing to boast about. In 2003, the current deputy federal Opposition leader Julie Bishop accepted a paid trip to China (Melbourne Age, January 27, 2008). In 2004, Australia's then Foreign Minister Alexander Downer, while visiting Beijing, claimed that it should not be taken for granted that Australia would side with the US in the event of a conflict between China and the US in the Taiwan Strait. (The Australian, August 18, 2004).

Professor Dong Li says Western politicians keep telling voters that the best way of bringing about progress in China is through "integration". But so-called "integration" has become a smokescreen for their shameless collaboration with the Chinese regime. "By so doing they serve the needs of their Chinese masters and reap huge personal gains," Li says.

"Just as James Mann asks in his book The China Fantasy: How Our Leaders Explain Away Chinese Repression (2007), it's now a question of who integrates whom," Li warns.

"The tremendous efforts now made by Western politicians and businessmen and the emphasis they give to 'cultivate personal relationships (guanxi)' with the Chinese leadership is just one sign that the Chinese way of life is integrating the Western elites.

"Now, after nearly 30 years of economic liberalisation, there have emerged in China a number of super-rich. According to a document from the prestigious Chinese Academy of Social Sciences, by March 2006, some 3,220 Chinese owned personal wealth exceeding 100 million yuan (US$78 million), of whom 2,932 - 91 per cent of the super-rich - are adult children of CCP leaders or top officials (gaogan zidi in Chinese, 'princelings' in English).

"In the most lucrative fields of Chinese economy - banking and finance, international trade, real estate development, large construction projects and stock market - 85 to 90 per cent of the peoples in dominant positions are gaogan zidi, or 'princelings'. In Guangdong province, home of most of the Chinese diaspora which has strong links with Australia, all the 12 top land-developers are gaogan zidi, or 'princelings'. A new bureaucratic-capitalist class is now firmly in place."

One-party dictatorship

Li said all this should not surprise anyone if one realises that the economic liberalisation introduced by the CCP has taken place under a one-party dictatorship with no independent judicial system or free press, in a time-honoured culture of personal and family loyalty.

"The CCP leadership maintains its grip on China's economy. All key sectors of the economy are state-owned - banking and finance, though foreign banks are invited to buy Chinese banks, no individual Chinese citizens are allowed to do so; energy (oil, natural gas, electricity); air, rail and sea transportation, telecommunication, war industry and defence projects, and the highly lucrative tobacco industry.

"Is this really a market economy, as New Zealand and Australia governments so happily claim?"

- Joseph Poprzeczny is a Perth-based freelance journalist and historian.


Richard Bullivant, "Chinese defectors reveal Chinese strategy and agents in Australia", National Observer (Council for the National Interest, Melbourne), No. 66, Spring 2005, pages 43-48.
URL: www.nationalobserver.net/2005_spring_102.htm

Andrew Campbell, "Guanxi and Australia-China consultants - the risk of dual allegiance", National Observer (Council for the National Interest, Melbourne), No. 68, Autumn 2006, pages 21-39.
URL: www.nationalobserver.net/2006_campbell_68.htm

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