October 16th 2010

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Articles from this issue:

NATIONAL AFFAIRS: How Abbott could have won the Coalition the election

CANBERRA OBSERVED: Labor opportunism over Aborigines, environment

EDITORIAL: Japan's foot-and-mouth disease threat to Australia

EUTHANASIA I: Physician-assisted suicide defeated in WA

EUTHANASIA II: What the public deserves to be told about euthanasia

EUTHANASIA III: Palliative care the answer to euthanasia

CHINA I: Espionage a key tool in Chinese statecraft

CHINA II: Falling into the trap of an Asian Munich

INTERNATIONAL AFFAIRS: Questions about Venezuela's links with radical Muslims

SCHOOLS: Old-school discipline best for children's sake

REPRODUCTIVE HEALTH: Post-abortion grief caused by brain's 'hard-wiring'

AS THE WORLD TURNS: American universities in decline / On getting boys to read again / West stuck in near depression / Euro may collapse

BOOK REVIEW: CLIMATE: The Counter-Consensus, by Robert M. Carter


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Espionage a key tool in Chinese statecraft

by Ian H. McDougall

News Weekly, October 16, 2010
 "To subdue the enemy without fighting is the supreme excellence" - Sun Tzu (c. 544-496 BC), Chinese military strategist.

The world inhabited by Chinese in Australia can be very murky indeed. China's communist regime puts substantial resources into spying on and manipulating Chinese businesspeople and students, whatever their national origin, and also buying influence with Australian citizens of non-Chinese origin.

The former Chinese consul in Sydney, Chen Yonglin, who defected to Australia in 2005, said that China has 1,000 operatives spying on Chinese students and businesspeople in Australia.

Espionage has always been central to Chinese statecraft and warfare, and it is part of China's strategic doctrine. Espionage is not an "add-on" in Chinese thinking. The aim of Chinese generals and rulers has been to gain maximum advantage with minimum actual fighting. Winning by strategy is preferable to winning by spilling blood.

American commentators say that China has the best espionage organisation in the world. Any person of Chinese origin is considered to be a potential source of information. The Chinese diaspora has always been important in Chinese politics. Most of the resources used by Dr Sun Yat-sen to overthrow the Ching dynasty in the Xinhai Revolution of 1911 came from overseas Chinese. Both China and Taiwan spend a lot of effort and money cultivating the overseas Chinese.

Traditionally, the Chinese have been sojourners - they have come to make money and even live, but they always trace their roots to their home village and clan lineage in the Chinese mainland. Most Chinese businesspeople prefer to deal with other Chinese from their own lineage or dialect group. Some dialect groups dominate in particular regions or industries. For example, Chinese from Fujian Province dominate the economy in the Philippines.

The key to understanding Chinese commercial, social and political relationships is the concept of guanxi. Guanxi can be translated as "relationship". Guanxi is built up over years. For example, it is quite common for Chinese people to have regular class reunions for primary school, secondary school and university to maintain and strengthen their ties.

Commonly, guanxi is built outwards. People will first form links with their own nuclear family, then their lineage, then the village, then the dialect group, then the province, then the nation. Escaping from the ties of guanxi is impossible for the average Chinese.

Take going to a restaurant, for example. "Going Dutch" is considered to be very rude and un-Chinese. The host will always insist on paying the bill. When old friends meet, they will literally have a fight over who will pay the bill. This fight often consists of one friend trying to pay the bill with a handful of cash, but being pushed back by the other friend. Not only will the person who pays gain honour by paying the bill; it will put the person who didn't pay the bill in debt to the person who did. These fights will often become quite physical.

When someone has a good business deal, wins the lottery, gets a big bonus or even has a birthday, they will be expected to ching ke, that is, invite their friends, workmates or family for a banquet. This can be quite expensive, but to ching ke is to gain "face" with your family, friends and workmates.

Some idea of the way guanxi operates can be found in the case of the relationship between federal Labor member of parliament Joel Fitzgibbon and Chinese businesswoman Helen Liu. Fitzgibbon and his father Eric, a former MP, had a long-term relationship with Madame Liu.

Madame Liu was a property developer, seemingly with money to burn, who became a major donor to the NSW branch of the ALP and to Fitzgibbon's election campaigns. Liu paid for two first-class airfares to China for Fitzgibbon, which he "overlooked" in his reporting to parliament. His father also became a consultant to an apartment development by Liu in the Chinese coastal city of Qingdao, despite the fact that the senior Fitzgibbon speaks no Chinese.

Joel Fitzgibbon also occupied - and claimed to have paid rent for - a property in Canberra, said to be owned by Helen Liu's sister, Queena.

Liu developed this relationship over many years and she hit pay-dirt when Fitzgibbon was appointed Minister of Defence by Kevin Rudd.

This became a major embarrassment for Rudd. Fitzgibbon also allowed his brother, head of a major health fund, to use his office when bidding on a defence health fund contract. For this offence, Rudd sacked him. More embarrassing details emerged about the Liu-Fitzgibbon relationship. Liu has now returned to China, where she faces allegations over the misuse of company funds.

While the relationship between the Chinese authorities, Liu and the Fitzgibbons remains unclear, it is a classic case of the Chinese method of building guanxi. The relationship was carefully cultivated over a long period, with substantial funds invested in building the relationship in the expectation that the favours given would be returned - with interest.

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