30 March 2009

Editorial: Time to calm down about China

There is so much immature commentary about China – its intelligence activities and its proposed mineral investments – in the air at the moment that it is time for everyone to take a cold shower and think about what they are saying.

To take the intelligence issue first, let us all acknowledge that China, like all major powers and all authoritarian regimes, has an avid thirst for intelligence, and is highly skilled in obtaining it. It is skilled at mounting technical attacks, and very skilled and diligent at obtaining “humint” (human intelligence), i.e., intelligence which comes from individuals finding out things that they ought not to be able to find out and reporting back to home base. In any society with a sophisticated approach to intelligence analysis the picture obtainable from covert sources is filled out by the insights gained from open sources – publications, conversations, and the knowledge which the nation’s nationals have of countries of interest.

Second, we may assume that Australia is a serious intelligence target. Not only are we an important country in our own right, and a very capable military power with very high level technology, we have very close military technology and intelligence links with the United States, the United Kingdom and a range of other countries. Any country that is serious about its intelligence gathering will be constantly probing and testing to see whether we present an easier way in to someone else’s secrets.

We routinely employ two lines of defence against intelligence attack. The first and most important is ensuring that access to classified information is granted only to people who are assessed by quite rigorous processes (and in the case of very sensitive information, extremely rigorous and intrusive processes) to be reliable, not only in the sense of their primary loyalty being oriented to Australia, but also in the light of assessments of their financial circumstances, personal behaviour, discretion and any other factor which might make them liable to coercion (blackmail) or otherwise make them an unreliable custodian of the nation’s secrets.

The bottom line of this process is to ensure that there is no-one with access to classified information who is likely, deliberately or inadvertently, to disclose to any unauthorised person information which it is their duty not to disclose. This is reinforced by the “need to know” principle – not disclosing information to any person who does not have a need to know it in order to carry out their duties, no matter how high their security clearances might be.

The second line of defence is the whole category of defences that we might call technical defences – physical security of bases and other facilities, firewalls on defence IT systems, encryption of signals, encryption of data on laptops etc.

It needs to be understood also that Ministers, senior military officers and senior defence civilians constantly find themselves in formal and informal contact with representatives of foreign governments (friendly, hostile or somewhere in between) who would love to know all sorts of things that we could tell them. To take just one example, during my time as Secretary to the Department of Defence the Head of the Chinese People’s Liberation Army came to Canberra and met the then Defence Minister, Ian MacLachlan. A day or so later Mr McLachlan entertained the Chinese delegation to an evening buffet on a boat on Sydney Harbour – a very pleasant occasion in an informal setting. These types of contacts are not a security risk – we are not going to disclose any sensitive information, and the guests know better than to ask.

Against this background people like Sydney businesswoman Helen Liu fade into insignificance as an intelligence risk. Apart from the fact that ASIO says it has no information to suggest that she is a threat, our first line of defence is that we may safely rely on any Australian Defence Minister not to disclose to any unauthorised person information which it is his duty not to disclose.

Regarding the proposed Chinese investments in the Australian minerals industry, for reasons set out in State-owned is not the problem I think there are good grounds for the Foreign Investment Review Board to turn down the proposed Chinalco investment in Rio Tinto.

I believe also that the Treasurer was right to demur at a proposal that would grant a Chinese corporation access to the Woomera Prohibited Area; that is the plain-English meaning of prohibited area.

These positions have nothing to do with xenophobia or a Yellow Peril mentality. They are sober assessments of where the national interest lies, and while it is possible to construct equally sober analyses that would disagree with them, it is unworthy for people to be dismissing as xenophobic or racist the arguments of those who express concern in these terms. Also, I believe that the Prominent Hill-Woomera issue is one to which it is not beyond the wit of man to find a mutually acceptable solution.

So everyone needs to calm down. It is not ridiculous to be alert to Chinese (or other foreign) intelligence activities, but people like Ms Helen Liu represent a very minor threat. It is not xenophobic to raise issues about proposed Chinese investments, and the Australian Government has both a right and a duty to consider each on its merits and determine where our national interest lies.

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