ESPIONAGE and political interference by foreign powers is at unprecedented levels in Australia and poses a major risk to security, the nation’s spy agency boss has warned.

Duncan Lewis, the Director-General of the Australian Security Intelligence Organisation (ASIO), told a Senate estimates hearing on Monday that he was concerned about escalating activities.

“Hostile intelligence poses a real and potential existential threat to Australian security and sovereignty,” Mr Lewis said.

“The harm from this threat may not manifest for many years, even decades, after the activities occur. We are concerned about threats from wherever they emanate.”

In an era of high-level hacking attacks, assassinations on foreign soil, astro-turfing fake news campaigns and infiltrating attempts of the political class, one expert believes espionage is a bigger problem now than during the Cold War.

The nature of espionage has changed rapidly, but in recent years China and Russia have ramped things up, said Professor Rory Medcalf, head of the National Security College at Australian National University.

“The activities that would be concerning ASIO cover the full spectrum from risks associated with political donations through to old-fashioned espionage.”

media_camera The level of espionage activity, especially by Russia and China, has reached unprecedented levels — and Australia is far from immune. Picture: AFP/Dutch Defence Ministry

On the traditional end of the spying scale, Prof Medcalf said it was a “fair assumption” to make that a number of countries currently housed intelligence officers in their embassies and consulates in Australia.

“That’s not a new thing. That’s how espionage has always been practised. And it would be reasonable to assume that China is the most active player in that sense, followed by Russia.”

But a determined focus by China to influence and take control of the “tone and policy choices” of decision-makers in the West has been a game-changer for spying, he said.

“In some ways, the espionage problem is probably worse than it was during the Cold War.”

PRESIDENT XI’S BRAVE NEW WORLD

A LOWER THRESHOLD

The rules and state of play of espionage across the board have shifted dramatically, particularly in the past few years, experts say.

Dr John Coyne, head of the Border Security Program at the Australian Strategic Policy Institute (ASPI), said some regimes have been emboldened by the West’s inaction.

“If I said to you a decade ago that the Russians would kill two of their citizens on UK soil, one with a chemical agent and the other using a radioactive agent, you’d think I was reading from the script of a James Bond film,” Dr Coyne said.

“If I told you North Korea would poison one of its citizens in a major airport using a chemical agent, you’d think it wasn’t possible.”

media_camera Duncan Lewis, Director-General of ASIO, has warned about foreign interference activities in Australia being at unprecedented levels. Picture: Kym Smith

Earlier this month, president of Interpol Meng Hongwei was detained by Communist Party authorities during a visit to Beijing. The Chinese national hasn’t been heard from since and his wife now fears he is dead.

“If I’d raised that as a remote possibility a decade ago, you’d think I was crazy, just as you would if I told you the Saudis would kill one of their citizens in one of their embassies and chop him up into pieces.

“The thresholds have dropped significantly and we face a completely different threat environment.”

He blames the slow international response to major, high-profile incidents for a growing confidence felt by certain regimes.

media_camera The apparent brutal murder of US-based journalist Jamal Khashoggi at the Saudi Consulate in Istanbul shows the rules of espionage have changed. Picture: Hasan Jamali/AP

media_camera The two Russian spies accused of carrying out the nerve agent attack on former Russian spy Sergei Skripal and his daughter Yulia on British soil. Picture: AFP/Metropolitan Police Service

“There is evidence that Russia was involved in the shooting down of (Malaysian Airlines flight) MH17 and they copped a few sanctions and not much else. Russia and North Korea’s assassination activities, barely anything,” Dr Coyne said.

“Those who will do us ill look and see little consequences for using these methods. The West isn’t responding, so of course those countries are emboldened. They can get away with it.”

Prof Medcalf said states like Russia tended to favour short-term and highly disruptive acts while China was very carefully and strategic playing a “long game”.

“A lot of it is about cultivating individuals, not for immediate use but to support China’s interests in the long run,” he said.

“Of course, that’s quite difficult to detect or respond to because it’s happening below the surface over a long period of time.”

BUYING LONG-TERM FRIENDS

In May, Mr Lewis told the Senate that foreign states have maintained an interest in attempting to sway key figures in public and private life in Australia.

Their efforts often appear harmless and friendly, but could have significant consequences down the track, the ASIO chief warned.

“Foreign (individuals) covertly attempt to influence and shape the views of members of the Australian public, the Australian media, officials in the Australian government and members of the diaspora communities here in Australia,” he said.

Foreign spies to face harsh new penalties under new Australian laws Foreign spies to face harsh new penalties under new Australian laws

Former Labor senator Sam Dastyari was embroiled in two scandals involving dealings with a Chinese businessman who was linked to the Communist Party.

Mr Dastyari was sensationally forced to quit the shadow frontbench in 2016 when it was revealed Huang Xiangmo had paid some of his bills, as well as being a campaign donor.

Then in 2017, he left politics all together after revelations he told the man his phone was likely being tapped, including by US intelligence agencies.

Mr Dastyari has denied any deliberate wrongdoing.

media_camera China’s activities, particularly in the strategically positioned Pacific region, has authorities in Australia and the US concerned. Picture: Daisuke Suzuki/AFP

“I think the two Dastyari affairs drove change,” Prof Medcalf said.

“Before that, there was a degree of naivety in the political class and a degree of denial. Political parties had become disturbingly dependent on foreign funding. That is changing.

“The unfinished business now is for new legislation banning foreign political donations.”

Professor Medcalf claimed China operated entire departments whose goal is “to co-op and exploit goodwill and friendly voices in foreign countries in order to increase China’s power and influence” abroad.

“That’s all kinds of seemingly innocent friendship societies and business lobby groups and so forth, but it provides a bridge for long-term Chinese influence,” he said.

media_camera Senator Sam Dastyari was forced to quit politics over his links to China in a scandal that coincided with Canberra proposing new foreign interference laws. Picture: William West/AFP

Another concern is China’s cash splash in the Pacific region, pouring significant amounts of money into infrastructure and nation-building projects.

Some fear the goal is to ensure long-term influence over countries that would normally be staunch allies of Australia.

media_camera China’s navy take part in an exercise in the South China Sea. Picture: VCG via Getty

In its last Budget, the Government announced the biggest-ever foreign aid package to Pacific nations, seen as a way of countering China’s activities.

The commander of the US Army in the Pacific region, General Robert Brown, told a conference in Canberra earlier this year that there were strings attached to the gifts from China, which should worry the West.

And in September, it was revealed Australia is developing plans with Papua New Guinea for a joint naval base on Manus Island after China took an interest in four major port redevelopments across PNG.

SNAPPING UP ASSETS

Another key strategy for China has been purchasing or investing in infrastructure projects in strategically positioned regions like Australia.

Chinese companies have been on a spending spree across the country for years, snapping up everything from housing and industrial sites to major ports in Darwin and Melbourne.

It spent a whopping $1 billion buying Aussie agricultural assets in 2017.

“The purchase of critical infrastructure by state-owned companies essentially sells off our strategic assets and puts them at the whim and control of a foreign power,” Dr Coyne said.

The telecommunications giant Huawei was blocked from bidding to develop and rollout Australia’s 5G mobile network due to security concerns.

media_camera Australian academic Clive Hamilton wrote the book Silent Invasion, claiming China’s influence in Australia is concerning. Picture: Gary Ramage

According to ASPI cybersecurity expert Tom Uren, it would have been impossible to employ Huawei without some degree of risk.

“The main concern is that they could covertly intercept our communications and get access to our devices — computers, phones, anything with a signal,” Mr Uren told news.com.au in June.

On the back of the decision, Shahar Hameiri, associate professor at the School of International Politics at the University of Queensland, said the Government was obviously scrambling to curb China’s spending in Australia.

“Scrutiny of the national security implications of infrastructure has been upgraded,” he wrote for The Conversation. “The new Critical Infrastructure Centre is assisting the Foreign Investment Review Board in this. Though not made explicit, the main focus is China.

CONTROLLING CHINESE EXPATS

The Federal Government passed sweeping foreign interference laws in June in a bid to respond to the growing problems identified by security agencies.

It’s hoped the laws will produce a stronger deterrence effect, but Prof Medcalf said the problem won’t disappear any time soon.

“One of the big challenges is that foreign states have tried to make use of individuals within communities here,” he said.

“The intimidation of Chinese community groups in Australia and the propaganda direction of some of the Chinese language media are potential risks.”

media_camera Professor Rory Medcalf said China’s attempts to control and intimidate Chinese Australians should be watched carefully. Picture: Gary Ramage

In September, The Australianreported that Chinese students at the University of Adelaide were targeted for appearing to campaign against communism.

“It has been alleged that some Chinese students who ran on an International Voice ticket for board positions of the Adelaide University Union threatened and intimidated other students from China who were campaigning for the rival Progress party,” the newspaper said.

It alleged some foreign students were told they would be reported to the Chinese Embassy in Canberra if they became involved with the student elections.

In the United States, intelligence agencies are becoming increasingly concerned about Chinese influence at universities across the country.

More than 100 higher education institutions are in partnership with the Communist Party indirectly via state-sponsored Confucius Institute, the Washington Post reported.

“The US intelligence community is warning about their potential as spying outposts,” it said.

And the magazine Foreign Policy reported that Chinese students attending American colleges felt fearful of Beijing’s growing influence.

“That pressure has become more apparent since 2016, when the Chinese Ministry of Education issued a directive ordering schools to instil greater patriotism and love for the party in students of every age — including Chinese students studying abroad,” the publication reported.

media_camera Hacking attacks believed to have originated in both Russia and China have targeted Australian interests. Picture: Mick Tsikas/AAP

China’s concern about its expats activities extends to the religious movement Falun Gong, according to Clive Hamilton from the Centre for Applied Philosophy and Public Ethics at Charles Sturt University.

“Chinese authorities in Australia are monitoring Falun Gong practitioners on the streets of Sydney and Melbourne, photographing anyone who interacts with them,” Prof Hamilton said.

“They can identify any ethnically Chinese person and put them on a watchlist. Some Chinese-Australians cannot even go to their places of worship without Beijing’s vast security apparatuses watching and reporting on them.”

Controlling members of the Chinese community in Australia seemed to be a major priority, Prof Medcalf said.

“We’ve got a large and diverse number of Chinese communities — 1.2 million people approximately — and the Communist Party wants to silence descent and criticism. In order to stay in power, the Chinese regime needs complete content from its own population.

“Criticism anywhere is a threat, especially criticism that can echo from outside within China.”

WAR IS NOW ONLINE

Efforts to weaken Western liberal democracies by foreign powers aren’t confined to far-flung battlefields or horrific terrorist attacks like they once were.

Nations, including Russia, are taking their efforts to the web, with units of hackers and teams of astro-turfers seeking to both discover as well as distort information.

“News and facts have been hijacked by new forms of distribution messages to reach out and shape views across the world, which can have an impact on the foundation of democracy,” Dr Coyne said.

media_camera The alleged interference by Russia in the US election sparked a slew of inquiries there and provided a wake-up call for the world. Picture: Don Emmert and Natalia Kolesnikova/AFP

The alleged interference by Russia in the US Election is the subject of multiple high-level probes there. Dr Coyne said Australia’s intelligence agencies would be closely monitoring the next federal election to prevent any potential interference.

“The American experience has been a wake-up call,” he said.

Other forms of cyber warfare target intellectual property and classified information.

Chinese hackers were blamed this year for several months of relentless attacks on computer systems at Australian National University, which is home to defence-focused research teams.

An unnamed foreign intelligence service was also the culprit for a 2015 malware attack on the Bureau of Meteorology, officials said.

Russian-backed hackers have been accused of attempting to infiltrate computer networks housing the official investigation into the downing of MH17, as well as the global nuclear regulation authority, earlier this year.

THE END GAME

But what is the actual goal of this new and unprecedented era of espionage, particularly for a participant as active as China?

“It differs from country to country but I think there are three or four key objectives for China in respect to Australia,” Prof Medcalf said.

“China wants to weaken the Australia-US alliance to reduce the possibility that Australia would support America in a conflict in the Asian region.

“It’s also trying to silence Australia’s independent voice in the Indo-Pacific region to make it less critical of Chinese policy. Many countries in South-East Asia look to Australia to be a solid voice. If that can be silenced, other voices can potentially be silenced as well.”

media_camera China’s end goal is to significantly grow its power and influence, experts say. Picture: Anthony Kwan/Getty

China also has an interest in growing its technological advantage in both a military and civilian sense, and Australia is home to both quality, cutting-edge research and sensitive materials shared by allies.

“And as I’ve pointed out, the final goal is to do with seeking to control Chinese communities in Australia,” Prof Medcalf said.

“It’s really important to note that this increased awareness is not about being anti-Chinese. It’s about protecting Australia and Australians. That includes Chinese Australians. If we let foreign powers intimidate communities here, we have failed to protect their freedoms.”

When the ASIO boss addressed the Senate in May, it was one of several recent strong-worded statements about foreign interference.

His stance has been seen as a way of keeping awareness on the issue but also sending a message to foreign agencies that Australia is watching.

“Foreign states maintain an enduring interest in a range of strategically important commercial, political, economic, defence, security, foreign policy and diaspora issues,” he said.

media_camera Interpol boss Meng Hongwei was detained by authorities in China earlier this month and hasn’t been seen since. Picture: Du Yu/Xinhua via AP

Dr Coyne said Australia and its intelligence agencies are responding to the problem but a bipartisan approach from political players is required.

“It’s hard for foreign interference to occur in the daylight. We need to shine a light on these activities,” he said.

“The flip side of the question is looking at the cost to privacy, to democracy and to freedom. There’s a lot of ground for us to explore here.”

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Originally published as China’s secret spy war with Australia