Red Zone

China's Challenge and Australia's Future

Peter Hartcher

• Editore: Black Inc.
• Anno: 2021
• ISBN:
  9781743821794
• Argomento: Politique et relations internationales
• Categoria: Géopolitique

What does China want from Australia? In this incisive and original book, Peter Hartcher reveals how decades of economic dependence left Australia open to the strategic ambitions of the most successful authoritarian regime in modern history. He shows how ideology, paranoia and Xi Jinping's personal story have reshaped China, and shines new light on Beijing's overt and covert campaign for influence – over trade and defence, media and politics.Australia has now woken up to China's challenge, from passing foreign interference laws to banning Huawei from our 5G network. But at what cost? Will we see a further slump in relations? How best to protect our security, economy and identity?Drawing on interviews with Scott Morrison, Malcolm Turnbull and other key policymakers, as well as a rare interview with Australia's spy chief, Red Zone is a gripping look at China's power and Australia's future."Australia is on the front lines of the global struggle between China and the West over democratic values, and Peter Hartcher, one of the country's foremost journalists, presents a clear-eyed and utterly frightening account of the challenge we face. Highly recommended "—Francis Fukuyama"Hartcher's analysis of Australia's place in the world is sharp and tenacious. He continues to make an outsized contribution to our democracy."—Penny Wong"Hartcher's clear-eyed analysis of the Australia–China relationship is as keen as it is unsettling."—Malcolm Turnbull

   1.  

RED LINE

Malcolm Turnbull was troubled. The prime minister was considering banning Huawei, one of China’s great companies and national champions, from the Australian continent. The telecommunications equipment maker also happened to be the biggest in the world in its industry, bigger than its US and Japanese rivals put together. Several countries had talked about banning it, but none had. The flagship company was to become an international acid test of nations’ trust in China.

Australia was about to start building its 5G, or fifth generation, wifi network. Much more than a phone system with faster internet, 5G would enable the Internet of Things. Could Huawei be trusted to supply the country’s central nervous system for a generation? Turnbull didn’t think so. “One thing you know – if the Chinese Communist Party called on Huawei to act against Australia’s interests, it would have to do it,” he says in an interview with me. “Huawei says, ‘Oh no, we would refuse.’ That’s laughable. They would have no option but to comply.”

But the consequences of a ban? Turnbull knew that Beijing would seek to punish Australia. Of course, China allows no foreign firms to build its 5G network. But Beijing is not about reciprocity. It’s about dominance. Xi Jinping had made it his personal mission to place Huawei at the centre of the global internet. He would later tell then US president Donald Trump that a ban on Huawei would “harm the overall bilateral relationship”, according to Trump’s former national security adviser, John Bolton. It was a remarkable elevation. Xi was putting the interests of one Chinese company at the centre of the world’s most consequential great-power relationship. It was, evidently, an extraordinary priority for China.

Turnbull sought a middle path. Was there a way to accept Huawei into the system and somehow manage the risk? That’s what Britain had done with Huawei in its 4G network. Turnbull’s history showed no inherent hostility to the Chinese company. When Julia Gillard’s Labor government banned Huawei in 2012 from supplying gear to the new National Broadband Network, Turnbull, as the shadow communications minister, promised to review the ban once in government. The Liberals ended up continuing Gillard’s ban. But now Huawei – and the Beijing government – was pressing to enter the next frontier.

Turnbull spent months researching, talking to Trump and other leaders in late 2017 and early 2018. He repeatedly turned to Australia’s top-secret electronic spy agency, the Australian Signals Directorate – equivalent to the US National Security Agency – for an expert verdict. Turnbull says, “I went back and forth with Mike Burgess [then head of the directorate and now ASIO’s director-general of security], pressing him to find an effective means of mitigating the risk. I would have preferred to have all vendors available in Australia, but not at the expense of security.” Burgess did come up with some mitigation measures. He and the ASD experts compiled a spreadsheet filled with hundreds of them. “We gave it a good red-hot go,” a senior intelligence official involved in the process told me in an interview. But there was a catch.

Turnbull, said the intelligence official, “is a big believer in tech. His starting point was, ‘Convince me that we can’t manage the risks.’ We worked extremely hard over eight, nine months, working it though.” The signals intelligence experts started from the proposition that Huawei equipment could be used in Australia’s 5G network. They posed themselves the question: how can we manage that risk effectively?

Burgess gathered his professional hackers from the ASD and asked them to play the red team, to put themselves in China’s shoes. They were “the best and the brightest”, said the official, drawn from the section that would be used to hack into networks overseas. They were told: “Let’s game it. Apply what we would do if we had a vendor that was working for us.” The telecommunications equipment vendor in question being Huawei, of course, the global leader in low-cost, high-grade telecoms gear.

A technologically sophisticated government already has the know-how to disrupt another country’s 5G system. But if that government has sway over a 5G vendor in the country it wants to strike, explained the official, “you can get there quicker from flash to bang, with zero cost of entry”. It could be done with a simple instruction to the company operating in the target nation’s 5G system. And that would be a “serious problem” for the target country.

Because it would bring down a network? Yes, but it’s more than that, said the senior Australian spy:

Here’s the thing that most commentators get confused about with 5G, including some of our American friends. It’s not about the interception of telephone calls. We’ve got that problem with 4G, we had it with 3G. It’s not that 5G is just a faster mobile phone network. It has lower latency. [It’s about] the speed at which boxes can talk to each other, and [at] higher density, so more devices can connect per square kilometre than ever before. It’s machines talking to machines.

And if the 5G network stops working? “The sewerage pump stops working. Clean water doesn’t come to you. You can imagine the social implications of that. Or the public transport network doesn’t work. Or electric cars that are self-driving don’t work. And that has implications for society, implications for the economy.” For these reasons, the 5G network will be “number one on our critical infrastructure list” in need of protection once it’s fully operational. Shutting down a 5G network at that point could throw the country into chaos.

So how would the Chinese government use Huawei to do such a thing? Putting himself in Beijing’s shoes, the intelligence officer said: “If I want to understand how to break in, I don’t have to break in. I just look at the blueprints – I understand the software, I know how it works. I know which engineering commands are there or what other commands are there for my purposes. That allows me to gain access, to switch things off, and that disrupts the country – elements of it, or the whole country. That’s why you’ve got to be concerned.”

Turnbull steeped himself in the detail. The prime minister was “very forensic in his questioning, he obviously did his own homework”, related the senior spy. “Bought himself a book on 5G security, I kid you not. We had to buy the book and make sure we understood it. It was a good grilling. [He] actually took us out for a spin.” The book, A Comprehensive Guide to 5G Security, is a dense, technical 474-page tome edited by experts in Finland, the US and Sweden.

As the Red Team of hackers worked through the risks, they compiled them in a spreadsheet. There were more than 300. Which meant that all 300-plus would need to be mitigated. Burgess and his staff brought the full compilation to Turnbull on big sheets of A3 paper and explained all the measures. They included having full and sole access to the source code, updates being done in Australia only, and full access to hardware schematics.

But even then, it would not be enough, they concluded. The devil was not only in the details – it was in the system design itself. And that was too hard to penetrate as outsiders. The senior intelligence officer explained: “It’s the control of the design that gives you zero cost of entry. It’s a lot harder to reverse-engineer to find the malign element. As opposed to talking to the designers and saying – as well as its legitimate function – if I give you this secret handshake, that requires you to turn it off. You can get there the hard way through trying to reverse-engineer it, or you can get there the zero-cost way by talking to the person who knows how it works. That’s the differentiating factor.”

On this basis, 5G components designed in China and made in a factory in China would pose a bigger risk than 5G components assembled in a factory in China but designed by Nokia in Finland or Ericsson in Sweden. In other words, it came down to strategic trust. The Commonwealth of Australia could rely on the Republic of Finland, home to Nokia, and the Kingdom of Sweden, Ericsson’s domicile, but it could not trust the People’s Republic of China to harbour only benign intentions.

What about simply limiting the deployment of Huawei’s gear to less sensitive parts of the 5G network? This is exactly what Australia did with its 4G system. “Historically, we have protected the sensitive information and functions at the core of our telecommunications networks by confining our high-risk vendors to the edge of our networks,” Burgess said in a 2018 speech. “But the distinction between core and edge collapses in 5G networks. That means that a potential threat anywhere in the network will be a threat to the whole network.” Turnbull liked to summarise this in internal debates with the rhyme that “the core is no more”. Burgess’s final advice to Turnbull and his National Security Committee was that the risk could not be mitigated.

Turnbull examined the question with his ministers and public service chiefs in the cabinet’s National Security Committee. If allowing Huawei into the system was a risk, a ban on it would carry risks of its own. Beijing had already damned Canberra for Turnbull’s laws against foreign interference and espionage by ending annual visits by Chinese leaders and freezing ministerial contacts. It already had an embargo on political contacts with Australia. Now Australia would be uniquely exposed to Beijing’s retribution if it were to be the first country in the world to designate Huawei as untouchable.

At this point, Peter Dutton intervened. The then Minister for Home Affairs had been involved in National Security Committee debates about Huawei over months, and he was growing concerned about Turnbull’s resolve. In a recent interview, Dutton says:

Australia had been in [an] appeasement phase for a long time. We’d allowed dollars to cloud our judgment. We were on a knife edge, speaking frankly. Huawei was the tipping point. A number of us had pushed for years. The public was there [in supporting a tougher line], the advice to us and the intelligence was clear – why are we not responding?

I saw this as a momentous decision for the government because it would affect the wellbeing of the nation for a generation. 5G will control autonomous vehicles, it will be doing remote monitoring of medical devices. It would be unconscionable to allow it to be compromised.

Dutton approached the prime minister in the cabinet anteroom after a National Security Committee meeting on 27 June 2018, about six weeks before the government was due to make its final decision. “I said to him, ‘This is a red line for me. We cannot allow Huawei into the network. I think the threat is only increasing, not mitigating.’” It was a threat to resign from the Turnbull cabinet. And that made it a leadership issue. Australia’s political class was feverish for a decade indulging the apparently addictive craze of dumping prime ministers at the first opportunity. Dutton was the favourite prime ministerial candidate from the conservative faction of the Liberal Party, and was preparing to strike at his leader. Turnbull might not have needed any extra pressure, but Dutton says he wanted to be sure. Says Dutton: “While Malcolm arrived at the right decision, I think he was leaning towards a mitigation approach.”

Turnbull had a different interpretation of their conversation. He recalled no mention of a “red line” nor any threat to resign. In a contemporaneous note in his diary provided to me, the then prime minister wrote: “Dutton came to see me to say that he could not accept any involvement of Huawei or ZTE in the 5G network, much muttering of how we have to be strong in the face of China. I reminded him that I had initiated the whole 5G review, that I had raised it with the US in DC, not vice versa, and had discussed it with Mike Pence, the intelligence community and, of course, with Trump. I emphasised we needed to work through this carefully not least because we need to coordinate with the US. He seemed okay at the end.” Turnbull made no promises to Dutton, but the cabinet’s National Security Committee decided to ban Huawei on 14 August.

The decision was made, the line drawn, but not announced for nine days. Turnbull played it cautiously. Australian diplomats informed Beijing of the ban days before the announcement. Turnbull phoned Trump the day before: “When I told Trump, he seemed a bit surprised.” In the announcement itself, there was no mention of Huawei or of the smaller Chinese telecoms gear-maker ZTE, and no reference to China. Just a country-agnostic principle: Australia was now prohibiting “vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law”. To keep it low-key, there was no press conference, just the statement.

Peter Dutton resigned anyway. After the Huawei decision had been made but before it had been announced, Turnbull decided that Dutton was about to challenge him for the prime ministership. Turnbull pre-empted him by calling a spill motion in the Liberal party room, which he won. Dutton then resigned from the ministry while he gathered strength for another assault in three days’ time. It was at this moment, the eye of the storm, that the Turnbull government announced the Huawei decision. But this weighty moment got scant notice in the Australian media, consumed by yet another spin of the revolving door. The announcement was made on 23 August 2018, Turnbull’s last full day as prime minister. He wasn’t around for Beijing’s reaction.

China’s foreign ministry said that it was “gravely concerned” at Australia’s “discriminatory measures”. China’s commerce ministry called it “the wrong decision” and warned of “a negative impact on the business interests of China and Australian companies”. In theatrical crescendo, the Communist Party’s China Daily newspaper denounced the decision as “poisonous to bilateral relations” and the Global Times said it was a “stab in the back” for Huawei.

By this time, Scott Morrison had come through the middle to defeat both Turnbull and Dutton to take the prime ministership. Dutton was reinstated as home affairs minister. In the secrecy of Turnbull’s National Security Committee, Morrison as treasurer had teamed with Dutton to run the hardest line against Huawei. Dutton privately described Morrison as a “fellow traveller” on this decision. Morrison himself claimed its paternity in an interview with me: “I issued the statement” banning Huawei. “I was actually treasurer and acting Minister for Home Affairs at the time. It was actually my decision and my recommendation, along with Mitch Fifield”, the Minister for Communications. Morrison had joint carriage of the legislation because of the treasurer’s power over foreign investment, and Fifield because of his ministerial power over the telecommunications system. Of course, no cabinet decision is made without the endorsement of the prime minister. This is an example of the adage that success has many fathers, while failure is an orphan.

Australia was the first country to ban China from its 5G network, setting a precedent for others, including the US, Japan, India, New Zealand, Singapore, Denmark, Norway, the Czech Republic, Estonia, Poland and Vietnam. Britain had decided to accept Huawei, but then changed its mind in mid-2020. The Chinese-claimed island of Taiwan, which knows China more intimately than any other jurisdiction, also banned Huawei.

Most of these governments shut out Huawei by default rather than by declaration, achieving the same result but with less fanfare. Washington directed its noisy belligerence to Beijing, but Japan, New Zealand, Norway, Singapore and Vietnam appeared to merely choose other companies by chance, and India said nothing officially but circulated an internal direction to all government ministries to exclude Huawei from any tenders. These countries hoped to be less obvious targets for Xi Jinping’s retaliation. Sweden was more direct. It’s Post and Telecom Authority announced in October 2020 that it would ban Huawei and ZTE because the “influence of China’s one-party state over the country’s private sector brings with it strong incentives for privately owned companies to act in accordance with state goals and the communist party’s national strategies”.

Australia had some evidence for its decision. The Chinese Communist Party enacted the National Intelligence Law of 2017. This law unequivocally requires that “any organisation or citizen shall support, assist and cooperate with state intelligence work” and aid the national intelligence agencies to “carry out intelligence work at home and abroad”. The weight of evidence only increased after the Turnbull government’s announcement. Beijing has now taken further measures to co-opt China’s private sector. By the end of 2018 more than 90 per cent of private businesses in China had established internal CCP cells to guide and monitor them, according to Beijing’s official tally. And in 2020 Xi Jinping announced a policy that obliged private businesses to work with the party’s United Front Work Department, which is responsible for mobilising Chinese populations abroad to serve Beijing’s interests. Private companies are required to “unswervingly listen to and follow the steps of the party”. Each of these measures explicitly adheres to the all-encompassing principle that Xi enshrined in the party’s constitution in 2017: “Government, the military, society and schools, north, south, east and west – the party leads them all.”

In this way the minutiae of Australian security and politics intersected with the great global geopolitics of our time. Morrison and Dutton now regrouped to prosecute Australia’s resistance to the Chinese Communist Party’s drive for dominance. And to brace for Xi’s vengeance.

2.

AUSTRALIA: RACIST OR ROLE MODEL?

When Australia c...

Indice dei contenuti

• Cover Page
• Title Page
• Copyright
• Dedication
• Contents
• Introduction
• 1. Red Line
• 2. Australia: Racist or Role Model?
• 3. Let’s All Get Rich Together
• 4. What China Wants
• 5. Taking the Flag
• 6. Daggers in Your Smile
• 7. The Big Fish and the Little Fish
• 8. The Red Detachment of Women
• 9. Lion Dance
• 10. How Much Can a Communist Bear?
• 11. “World in Great Disorder – Excellent Situation”
• 12. What Does Xi Want?
• 13. Make the Past Serve the Present
• 14. The Fall and Rise of China
• 15. Dragon in Your Living Room
• 16. Paradox of Paranoia: Eleven Types of Pain
• 17. Cyclops
• 18. New Gold Mountain
• 19. Not With a Bang
• 20. Intelligence Test
• 21. Dye Australia Red
• 22. Can We Endure?
• 23. Brace
• Acknowledgements
• Index
• Back Cover