Archive

Tag Archives: Australia


With Prof Peter Varnish OBE, Macdonald Laurier Institute, September 2021

The international environment is increasingly insecure. Under the leadership of Xi Jinping and Vladimir Putin, China and Russia are attempting to reshape the international system and constrain the liberal democratic West. State competition is changing, in a shift towards deniable, intrusive, and non-military threats against all sectors of society and, as a result, liberal democracies are increasingly looking for collective ways to respond. To meet this growing global challenge, Canada could do much more with the historic Five Eyes grouping that also includes the US, UK, Australia and New Zealand.

The Five Eyes began primarily as an intelligence-sharing and technology collaboration arrangement. But in a new joint publication between the Daniel K. Inouye Asia-Pacific Center for Security Studies and the Macdonald-Laurier Institute, authors John Hemmings and Peter Varnish argue that the Five Eyes grouping could be used by Canada and others to expand the ability to counter and deter China and Russia across multiple areas, including technology, information, military, and economics.

According to the report, titled “Evolving the Five Eyes: Opportunities and Challenges in the New Strategic Landscape,” the Five Eyes has many advantages, from its proven history of creating effective personal relationships across all five countries to its ad hoc, fluid informality which makes it an ideal vehicle for expanded security cooperation. The countries share a common language, democratic traditions and legal systems and they have largely compatible militaries and security practices.


The UK risks plunging the Five Eyes alliance into crisis

The Telegraph, 4 March, 2020

The Five Eyes alliance has long been a bulwark of the free world. On one level, it is simply an intelligence-sharing partnership between the US, the UK, Australia, Canada and New Zealand. Yet it is able to function as perhaps the most comprehensive espionage alliance in history because of implicit trust between its members, based on an understanding that they share the same interests and ambitions.

Now it is approaching a crisis. And although the UK’s decision to involve Huawei in its 5G infrastructure is the leading cause, this dispute is a symptom of far more fundamental differences over the alliance’s approach to China.

These disagreements have begun to spill over into the open. Last month Mick Mulvaney, the acting chief of staff to President Trump, warned British officials of a “direct and dramatic impact” on intelligence sharing with the US following the UK getting into bed with Huawei.

Meanwhile, Australian MPs on their parliament’s intelligence committee were said to have leaked details of a tense meeting with Dominic Raab, the Foreign Secretary. New Zealand and Canada have been watching from the wings in dismay – but the time is coming when they, too, will have to pick a side.

In all of this, UK discussion of the issue has focused on risk mitigation – whether the threat posed by China can be contained in the specific matter of 5G. But British efforts to reassure their allies are not working. Australia and the US aren’t impressed by London’s attempts to use technical arguments to fudge what they see as a geopolitical debate for commercial reasons. At heart, they are critical of London’s prioritisation of business as usual with China over their collective security.

They see China as a growing regional and global destabiliser – a revisionist power that must be checked. To them, the UK’s Huawei decision illustrates a wider British willingness to sacrifice security for the sake of its own narrow interests.

Of course the UK is free to ignore such worries, but there could be consequences. Britain has stated that it wishes to sign trade deals with both the US and Australia, and the response has been largely positive. Yet it is not clear that those involved can skirt around the issue for much longer.

This is for three reasons. The first is Donald Trump. Although he views renegotiating the US trade posture as a cornerstone of his presidency, he has not taken the Huawei decision well.

Second, the UK has still not fully understood the scale of the diplomatic damage. Continuing to treat this as a solely Huawei-related problem rather than a broader China issue has annoyed American and Australian foreign policy experts, particularly in their security communities. From their perspective, Britain is ignoring an assumption, built into Five Eyes, that all five are to defend themselves and each other from authoritarian states.

Third, there are troubling signs that China is developing a strategy which draws on the UK’s resources to achieve its ambitions. Consider its investment in the UK fintech and hi-tech sectors and the calls for a “Golden Era” relationship.

It is only becoming more obvious to Washington and Canberra that, while they have adjusted to Beijing’s aggressive stance, the UK – and to a lesser extent, New Zealand and Canada – have not. Such divergence is unsustainable if Five Eyes is to function smoothly – and this on top of the UK’s belief that it should focus more on Russia than on China.

Britain now faces a difficult choice. It can continue its current approach towards China and attempt to reap the economic gains. Alternatively, it might craft a more careful approach, similar to those of the US, Australia and Japan.

Neither option is without cost. The latter means giving up some of those commercial benefits, insisting on scaling back the non-standalone 5G infrastructure which Huawei has already deployed, and realigning foreign policy more broadly. Going ahead with the former, however, risks much graver consequences. The Five Eyes partners are not about to stop working together – but such a deep and special partnership will not last unless all its members trust that they are working for the same ends.


Why Britain’s spooks are wrong to downplay the risks of Huawei

13CB7C90-E335-4BE6-A3FE-7858F4C14007

The Telegraph, 14 January, 2020

Sir Andrew Parker’s assertion that incorporating Huawei components in the next stage of the UK’s 5G network would be unlikely to disrupt intelligence relations with the US or its allies is alarming for a number of reasons. It would appear that the UK’s spymasters have decided – much like Britain’s telecommunications companies – on a policy of asking the right questions in order to guarantee the right answers.

The UK needs Huawei’s 5G tech at its laughably cheap prices. And so ignored is the geopolitical context of an increasingly authoritarian China, funding Huawei’s expansion across Europe. Ignored is the company’s role in Xinjiang. Ignored is China’s place as a leading source of global cyber espionage. Ignored is the 2017 National Intelligence Law which requires Chinese companies to cooperate with China’s intelligence agencies, at home and abroad. Ignored are China’s increasing influence operations inside Western democracies.

Instead, the decisive question in Britain’s 5G debate has become a comically narrow one: will Huawei’s inclusion into Britain’s 5G networks be a threat to the network’s integrity?

The UK’s National Cyber Security Centre (NCSC) argues that it can mitigate this risk by using multiple vendors – a mixture of Huawei, Ericsson, and Nokia – and by restricting Huawei’s components to the periphery or “non-intelligent” bits of the network.

According to the National Cyber Security Centre (NCSC), the telecoms network is structured around three functional parts. The transport layer, the physical nodes that transport data; the routing layer, which works out the best transport route for the data to use; and finally, the edge, where consumers – that’s you and me – interact with it.

Huawei, they tell us, will be kept out of the core, which is a functional name for all the bits that decide who you are, where your data needs to go, and so on. That means they’ll be restricted to antennas, routers, switches, and products at the consumer end such as WiFi boxes, and away from the intelligent bits that have more access to the data.

The NCSC seems to indicate that this has long been a deciding principle, but we know that BT began ripping out Huawei components from its 4G core as late as December 2018, meaning either the principle only dates from then, or the NCSC does not keep a close eye on the network. Neither is very reassuring.

The NCSC has also said that any code used in components in the network – such as antennas and routers – will be pre-checked for backdoors and vulnerabilities at its Huawei Cyber Security Evaluation Centre (HCSEC) in Banbury, Oxfordshire. It sounds rather good, especially since Huawei has agreed to pay for it all.

The problem is that checking code will not work any better than the plan to keep Huawei out of the “core”.

5G will be a virtual network, in which components of the network are “white-boxed”, meaning that network administrators can upload patches for fixes and updates remotely. Think of 5G as something akin to your phone. When an app on your phone is updated, that is because someone in Silicon Valley pushed a button, sending updated code – a patch – to all phones with that app.

As one US cyber official recently stated, it’s what makes 5G so attractive to network administrators – site visits become increasingly unnecessary as more repairs to the network infrastructure can be done remotely. It also gives network administrators the ability to move functionality – including the intelligent bits – around the network to fit requirements.

 

But it is this flexibility that makes the trustworthiness of telecoms vendors so important when it comes to 5G. In a virtual network, an untrustworthy vendor can send the good as well as the bad.

In order to stop such malware, the NCSC would have to watch hundreds of thousands of antennae and components across an entire national network. As with terrorism, we’d have to be lucky every time, but a cyber hacker would have to be lucky only once.

In a report released last March, the HCSEC Oversight Board, tasked with overseeing the Huawei centre in Banbury, noted that it “continued to identify concerning issues in Huawei’s approach to software development, bringing significantly increased risk to UK operators, which requires ongoing management and mitigation”.

The report continues that they can only give “limited assurance that the long-term security risks can be managed in the Huawei equipment currently deployed in the UK”. Imagine if they were discussing airline safety instead of just critical national infrastructure.

Even more damning was a report by Finite State – a private tech consultancy – that sought to replicate HCSEC’s review of Huawei source code. However, instead of using code provided by Huawei, it used code found in Huawei products already on the market. Alarmingly, not only did it find significantly more vulnerabilities than other brands, it found efforts to disguise those vulnerabilities.

This past year, Chinese diplomats have threatened economic retaliation against Germany and Denmark if they exclude Huawei in their 5G networks. One wonders what type of pressure Beijing has exerted on the UK behind the scenes. Certainly, Liu Xiaoming, China’s Ambassador, has already openly said that future investment could be at risk.

However, Britain does not and should not do business at gunpoint. Before this Government makes a very costly mistake, it must thoroughly explain its technical mitigation measures, both to the public, and to its allies.

Anything less smacks of bowing to Chinese pressure. And that’s something we can’t mitigate against.


The Times, 16 May, 2019

In a strongly worded foreword to the report from the Henry Jackson Society, the conservative think-tank, the former chief of MI6, Sir Richard Dearlove, branded the government’s strategy a risk “we simply do not need to take”. He called on the government to “reconsider the Huawei decision” and not to “worry about giving offence to China” or “be influenced by the threat of the economic cost”.

The report said it was quite possible that UK cyber experts would be unable to find any “Trojan horses” that existed in Huawei’s equipment even if they searched for years. One of the report’s authors, the Conservative MP Bob Seely, warned that Huawei risked becoming a “cyber-Hydra we cannot control”.

The Times, Charlie Parton, 16 May, 2019

If the smokescreen of a “golden era in UK-China relations” befuddles them, they could do worse than read the report put out today by the Henry Jackson Society. It sets out, with great lucidity, why allowing Huawei a role in the UK’s 5G would be a massive mistake, both for technological reasons and to avoid putting long-term trust in a company so closely bound up with the Chinese Communist Party (CCP). American and Australian contributors to the report explain why their governments have banned Huawei.

5G will be a critical part of national infrastructure over the next 30 years. The report lays out how Huawei’s ownership (far from transparent, but despite its claims not a private company), its ties to and support from the CCP, as well as an obligation under Chinese law to help Chinese intelligence add up to a threat our national security. Ministers should read the report.

 

The Telegraph, Harry Yorke, 16 May, 2019

Huawei argues that these are “hypothetical scenarios” which misunderstand its role as a manufacturer rather than operator in the network, insisting that its founder has made clear it would never install backdoors.

However, Mr Turnbull has endorsed a wide-ranging report published on Thursday by the Henry Jackson Society think tank, which claims the UK’s risk assessment of Huawei is so “narrow” in scope and definition that it is effectively “useless”.

The report, co-authored by Dr Varnish, Dr John Hemmings, director of Asia studies at HJS, and the Conservative MP Bob Seely, claims the “purely technical mandate” used to assess Huawei fails to consider the “wider issue of trust” and the political and legal climate in which it operates.

The trio have urged the Government to block Huawei from the 5G network unless it can demonstrate a “very high degree of insulation” and to work with its Five Eyes allies to create a new system which considers a firm’s “ownership, legal environment and transparency”.

Their concerns are echoed by Sir Richard Dearlove, the former head of MI6, who in a foreword to the report warns that however “remote” the threat may seem, it is one “we simply do not need to take”.

 

Daily Mail, 16 May, 2019

In its report, co-authored by Conservative MP Bob Seely, the HJS said that while Huawei claims to be a private company, in China it acts like – and is treated like – a state-owned enterprise.

It said the company’s organisational structure is “opaque” and it is subject to China’s National Intelligence Law, which means it could be required to assist China’s intelligence agencies in their operations and research and development.

It also questioned claims the risks to UK security could be “mitigated” by excluding it from the “core” elements of the network and restricting it to “dumb” components like antennas.

The report said: “Our technical advisers have indicated that antennas can be modified at both the hardware and software level.

“Indeed, as 5G means moving more and more to software-networking, the ability of a manufacturer to re-purpose an antenna without detection will increase.”

 

BBC News, 16 May, 2019

In a foreword to a new report by the Henry Jackson Society think tank, Sir Richard said: “The fact that the British government now appears to have decided to place the development of some of its most sensitive critical infrastructure in the hands of a company from the People’s Republic of China (PRC) is deeply worrying.

“The PRC uses its sophisticated technical capabilities not only to control its own population (to an extreme and growing degree), but it also conducts remotely aggressive intelligence gathering operations on a global scale.

“No part of the communist Chinese state is ultimately able to operate free of the control exercised by its Communist Party leadership.

 

The Guardian, Dan Sabbagh, 16 May, 2019

In a report from the Henry Jackson Society (HJS), the authors go on to claim Huawei “has long been accused of espionage” – a claim denied repeatedly by the firm – and notes that “while there are no definitely proven cases”, a precautionary principle should be adopted.

The document is co-authored by the Tory MP Bob Seely, who has already raised concerns about Huawei, and the expert academics Prof Peter Varnish and Dr John Hemmings. It adds to pressure heaped on the British government to reconsider letting Huawei participate in the UK’s 5G network from the US and Australia, whose intelligence agencies share information with the UK

 

Graeme Burton, Computing, 16 May, 2019

Huawei has lashed out at a report by the Henry Jackson Society, co-authored by a Conservative MP and a former scientific advisor to the Ministry of Defence, that argues that Huawei should be barred from every aspect of the UK’s 5G networks.

“The People’s Republic of China uses its sophisticated technical capabilities not only to control its own population (to an extreme and growing degree) but it also conducts remotely aggressive intelligence gathering operations on a global scale,” wrote former head of MI6 Sir Richard Dearlove in the foreword.

He continued: “No part of the Communist Chinese state is ultimately able to operate free of the control exercised by its Communist Party leadership… China’s military strategists perceive a world in which the military and the civilian will be fused into a single plane of conflict. The ability to control communications and the data that flows through its channels will be the route to exercise power over societies and other nations.”

While Huawei claims that it is employee-owned, the report points out that it is, in reality, 98 per cent owned by a trade union committee and that, in China, trade unions are subordinate to the state – effectively making it state controlled.

In addition, China’s government treats the company like a state-owned enterprise, lavishing it with up to $77bn in lines of credit to underwrite its rapid expansion in China and overseas.


Australian Financial Review, Hans van Leeuwen, 9 May, 2019

The Five Eyes partnership is extremely robust but not entirely unbreakable, said John Hemmings, director of the Asia Studies Centre at the London-based Henry Jackson Society.

“If the technical vulnerabilities are such that they threaten US and Australian national interests or security then inevitably there will be a gradual degrading of what is shared, and that will be a tragedy for Britain and for the other four,” he said.


The Huawei deal puts Britain’s Five Eyes relationships at risk

FILES-SPAIN-TELECOM-MWC

CapX, 25 April, 2019

With the NCS leak about Huawei’s inclusion in the UK’s 5G infrastructure on the front pages, the Five Eyes intelligence alliance has come under renewed scrutiny. Our role in the world’s largest and longest-lasting intelligence partnership has been one of our key assets, enabling us to punch above our weight in Washington and in corridors of power across the world.

But intelligence relationships are a lot like a marriage. They involve trust – and the development of key institutions or traditions that keep each partner reassured about the intentions, reliability, and thoughts of the other party. The Five Eyes relationship, a marriage, if you will allow, is an incredible feat of alliance-management. Many Britons know little, if anything, about it. If they do, it’s probably through the X-files or Wikileaks. The reality is more banal but at the same time, more incredible.

After fascism was defeated in the Second World War, five democracies (Australia, New Zealand, Canada, the UK, and US) pooled their resources on human and signals intelligence. Crossing into uncharted territory, they institutionalised intelligence-sharing in ways that are unprecedented for sovereign states. Later, programmes were created allowing officers from one country to serve in the corresponding bureaucracy of another allied nation. A British signals officer might spend time in the NSA in Maryland, or a Canadian diplomat might spend a year in the FCO, or an Australian defence official might serve time in the Pentagon.

These intelligence bureaucracies might have presented risks to the democratic integrity of the participating nations, but surprisingly, the Five Eyes relationship worked seamlessly from its earliest days. The robust constitutions underpinning all five countries allowed elected representatives to oversee the budgets and policies of their intelligence services and manage them according to their democratically permitted discretion. While slip-ups occurred, they were the exception rather than the rule. The group spent the Cold War protecting the rights and freedoms of many ordinary citizens to great success, all in the shadows and for very little personal reward or public acknowledgement.

As the cyber age arrived, the Five Eyes adjusted and adapted, but they have not always been quick off the mark. The current arrangement by which British engineers check Huawei’s code and equipment occurred after a slip-up in the early 2000s when BT nearly awarded a network contract to what was then an obscure Chinese tech company with little security oversight.

Twelve years on and that company has gone from strength to strength, combining the telecommunications ability of BT with the data-storage capacity of Google and the powerful handsets of Apple. It’s a remarkable achievement, but how exactly did Huawei come to dominate the European telecoms market so quickly? What role did state loans play in subsidising products that were sometimes 18 per cent cheaper than its competitors?

As we approach the end of the telecoms review process, it has become clear that a great lobbying battle has taken place in Westminster between Huawei and its British carrier-supporters who stand to benefit from its financing, and the Australian and US Governments, whose security is under threat. It’s been clear that despite presenting the UK with constant signs of Huawei’s links to Chinese intelligence, examples of hacking behaviour, and involvement in the situation in Xinjiang, the National Security Council has decided that the UK can “mitigate the risk”.

After all, they reason, we handed 4G over, surely a 4G solution for a 5G problem will do the job. The problem with this assessment is that by the Government’s own accounts, Huawei’s 4G solutions were not up to standard.

That should have been the end of the story, but Brexit has played a large role behind the scenes. It leaps off the page from a report commissioned by network carriers that says “£7 billion at risk if Huawei banned”. It leaps out again when The Guardian asks in tremulous tones whether a ban will impact Britain’s trade relations with China (No.It didn’t with either the US or Australia who have whopping trade relations with Beijing). And so, the panic has continued.

Liz Truss, Chief Secretary to the Treasury , is quoted in the Daily Express as saying that a decision should be made on a “case-by-case” basis, and that any decisions “should be led by the UK – we shouldn’t be deciding on the basis of what the Americans think or what the Australians think” , which is the marital equivalent of telling your spouse that you’ll have a drink with whoever you damn well please and that they shouldn’t be suspicious.

The government has a right to make its choice, but there will likely be unforeseen consequences as a result of its decision. With Five Eyes, Britain is married. It has partners that trust it to do the right thing and in exchange provide it with vast amounts of sensitive real-time data. The Treasury might not think that is very important, but Britain’s spy chiefs do and the trust shared between partners is certainly worth more than £7 billion and being degraded to a second-tier partner or being excluded altogether would be a huge blow to our capabilities.

In the long run, Britain can do what it wants. Washington and Canberra won’t force us to do the right thing, but they will have to react and protect their own interests and the interests of the remaining four, but China’s covert influence-campaigns and given the known unknowns of 5G, the British government should spend more time thinking these questions through.


There’s no way we can trust the tech arm of the Chinese state to run our communications

TELEMMGLPICT000190726434_trans_NvBQzQNjv4BqpVlberWd9EgFPZtcLiMQfyf2A9a6I9YchsjMeADBa08.jpg

With Bob Seely, MP, The Telegraph, 24 April, 2019

The decision by the National Security Council to greenlight Huawei’s limited participation in the construction of Britain’s 5G network is incomprehensibly short-sighted. It is a cyber Trojan horse. 

The NSC approval of some sort of half-way measure – which will allow Huawei to participate while limiting it to the periphery away from the “core” of the network – sounds reassuring. However, behind all the techno-babble is the hubristic argument that the UK Government believes that it can contain Huawei-related risks by technical means. Not only is this wrong, it reveals an approach to risk-assessment that is so narrow it is basically useless.

There are two vital questions that the Government needs to ask: What is Huawei’s relationship to the People’s Republic of China? And what are the risks to the UK – economic, security, and political – of including Huawei in its digital infrastructure? As far as we are concerned, from months of research towards a report that will be published next month, these questions have not been adequately answered.

We still lack enough knowledge about 5G to ascertain whether concepts about layered defence will still hold with the new system. There are arguments for and against the Government’s position, but not even the technical community is unified in this understanding. Indeed, the idea of merely allowing Huawei to build the 5G antennae has serious flaws related to the re-purposing of subcircuits.

We have been reassured that US warnings about Huawei are overblown because it is a “private” company. Huawei even invited scores of Western journalists to its massive campus in Shenzhen to share its heart-warming tale of the brave little firm that could, rising up against all odds to become a global powerhouse as an employee-owned firm. But this is simply not true. It is, to all intents and purposes, part of the Chinese state.

We know from the CIA’s briefings to its Five Eyes allies that Huawei is known to have been funded by Chinese state intelligence. It’s Chairwoman, Sun Yafang, between 1999 and 2017, worked for state security before assuming her role at Huawei. 

Why should all this matter? Because Huawei is to all intents and purposes a state-owned, state-directed, and state-funded entity. They do not operate on capitalist principles, often work in line with state strategic direction, and are unfairly subsidised, outcompeting the local firms. Huawei’s rise in Europe from 2.5 per cent market share to 25 per cent market share occurred at least in part because it had a credit line of £30 billion, allowing it to undercut European competitors by 18 percent. That’s not capitalism as we know it, that’s a state-funded monopoly. And it is a state-funded firm which is operating to China’s state agenda. 

Who controls communications will have great power over our societies in the future. Therefore, ownership of those communications structures, access to the information flows and the attitude toward human freedom, is paramount in shaping free societies in the 21 st Century and beyond. Huawei, whilst a private company, is the preeminent commercial communications firm of the Chinese state which, under Chinese law, must support the state’s intelligence work. By allowing Huawei to be a part of our hugely complex 5G networks, we take a risk with the future of free societies. How much risk is the question, not whether there is risk.

In all this, the risks are more varied and more concerning than simply network stability. They are economic as Huawei eats up Western 5G competitors; they are security-linked as Huawei maintains our networks, running our systems without transparency and without proper safeguards in place; and finally, they are social as Huawei enters Western society through our devices. 

Last year Australia blocked Chinese 5G providers. The US, Japan, and India appear to be doing the same. We need to be mindful of our alliances and security partnerships. In 2017, we learned that Western companies had misused user-data to impact a democratic election. These were companies staffed by people who were raised in Western liberal societies, who for the most part think that democracy is a plus. Huawei’s workers have grown up in an increasingly-authoritarian China that has planned a complex Orwellian techno-surveillance state for the past 10 years and is now on the cusp of rolling it out.

If we can’t trust our own high-tech firms, what’s to say that we can trust the corporate arm of the Chinese Party-State with our data, our security, and our values? The simple answer is that we can’t.


Should the UK follow its allies’ lead and ban Huawei?

47788DC4-E938-4BD1-8C15-93222469593E

CapX, 22 November, 2018

The news this week that the EU has provisionally agreed to screen foreign investments into its digital sector is an indication that worries about Chinese state-driven investment into the West’s digital infrastructures are growing.

The fact that Germany is now thinking of following India, Australia, and the US in banning the Chinese electronics firm Huawei from deploying or taking part in the construction of its 5G network puts immense pressure on the UK to follow suit. While the Department of Digital Culture, Media and Sport and the National Cyber Security Centre sent telecoms companies a letter earlier this month warning of changes that might take place after Spring 2019, when a security review is completed, media reports have played down the idea that it is aimed at Huawei or other Chinese telecoms companies.

However, the timing is auspicious, since according to media sources, the review was begun in July. While it is not clear the two events are connected, the Huawei Cyber Security Evaluation Centre Oversight Board also released its annual report in July, which found that “shortcomings in Huawei’s engineering processes have exposed new risks in the UK telecommunication networks and long-term challenges in mitigation and management”. Naturally, if the two are connected, it puts at risk the £3 billion that the Chinese telecoms giant has promised to spend in the UK over the next five years.

That such a review comes in the middle of the Brexit crisis seems ludicrous. Can Britain really afford to look this particular gift horse in the mouth?

This debate – one that is taking place between those who seek the nation’s fortune and those who commit to its security – is at full tilt this year, not only in Whitehall, but in the City as well. The possible ban is only the tip of the iceberg as the Government considers a proposal organised by the Business, Energy, and Industrial Strategy Department, to tighten restrictions around investments into sensitive sectors of the UK economy.

However, while the UK’s actions might seem perverse, it is actually behind the herd as various countries have begun to do the same. In July 2017, Germany tightened its investment restrictions over foreign firms attempting to take over companies that possess key technologies or to acquire parts of Germany’s “critical infrastructure”. This autumn, after a year’s debate, the EU provided similar investment screening standards and a mechanism for cooperation.

While this might look as though President’s Trump’s protectionist policies are having an effect across the global economy, the problem actually lies with China. Under President Xi Jinping, the Communist Party has begun to roll back economic reforms, particularly those around its state-owned enterprises. While they only make up five per cent of Chinese companies, such is their size that they account for one third of China’s economy and play a direct role in state strategy.

The controversial Made in China: 2025 policy – now absent from Xi’s speeches – revealed a bold strategy for China to fund its national champions to go out and acquire sector dominance in the supply chains of critical technologies. Many of these – like AI, quantum computing, and machine learning – have multiple usages, including those in military and security sectors. Were China to fund its companies to buy up or dominate its Western competitors, it would not only be breaking WTO rules, it would also have grave geostrategic implications for the future of the rules-based order.

There are those who see Xi as making a colossal strategic mistake by pushing state control over the Chinese economy. In his 2016 book China’s Future, noted China scholar David Shambaugh argues that  that Beijing’s existing policies amount to a “terminal cancer”. For Carl Minzner, an expert on Chinese law, the current situation “makes it easy to imagine Chinese politics devolving into a steady spiral of elite infighting, economic decline, ideological polarisation, and rising social unrest”.

Does this have anything to do with Huawei in the UK? Well, that’s the main question that the review is shirking, as it attempts to look at technical vulnerabilities. What it won’t consider is the wider domestic situation in China, where a new intelligence law requires Chinese companies and individuals to cooperation with Chinese intelligence organs at home and abroad. Article 11 from the legislation reads: “National intelligence work institutions shall lawfully collect and handle intelligence related to foreign institutions, organisations or individuals carrying out, directing or funding foreign or domestic institutions, organisations, or individuals colluding to carry out, conduct activities endangering the national security and interests of the People’s Republic of China”.

According to Australian intelligence sources, there is already evidence of Huawei collusion with Chinese intelligence in accessing a third country’s network. For British officials in Whitehall, this is all well and good, but the economic pressures of Brexit are difficult to ignore. There may yet be a halfway house that allows the UK to protect its infrastructure while reaping the benefits of Huawei’s technology.

The big question is whether the watchers can catch everything they are supposed to? What are the repercussions if malign code or back-door components are allowed into Britain’s digital infrastructure? What happens to Britain’s place in the Five Eye’s intelligence network if it is found to have been compromised? Outside the EU, London would not want to lose yet another important grouping over which it is able to understand global events and exert leverage in the “special relationship”.


AUKMIN 2018: The Future of Global Britain?

s300_IMG_1048

RUSI Commentary, with Milia Hau, 14 August, 2018

Britain and Australia face an uncertain strategic landscape. But there is much they can do together, as they deal with the two big powers which appear determined to change the current status quo: China and Russia.

The scene for the 10th annual Australia-UK Ministerial Consultations (AUKMIN) earlier this summer was visually stunning. Australian Foreign Minister Julie Bishop and Defence Minister Marise Payne met with their British counterparts, Jeremy Hunt and Gavin Williamson, at the Royal Botanic Garden in Edinburgh for the AUKMIN meeting. While the visuals were good, it was clear that both liberal democracies came to these negotiations nurturing some very serious misgivings about their strategic environment.

For Australia, it has been an annus horriblis, as it has lurched from one diplomatic spat with Beijing to another, all of them driven by Canberra’s belief that Beijing has been meddling in its domestic affairs and waging an influence campaign among the Chinese diaspora, as well as Australia’s own political elite. For the UK – apart from the running sore of Brexit – the year has been dominated by the Skripal incident in Salisbury, which saw the use of a nerve agent on British soil, resulting in the expulsion of 23 diplomats, and a crackdown on Russian oligarch investments inside the City of London. As these two neo-authoritarian powers become increasingly bold, both London and Canberra have had to deal with a US that is seemingly less reliable, or perhaps more transactional.

It has been an odd time for Western liberal democracies, as they have slowly begun to react to the new geopolitical competition that has intensified in the wake of 2014, when China militarised islands in the South China Sea, and Russia invaded and occupied Ukrainian territory. As a result, the AUKMIN joint ministers’ statement resonated with concerns for the rules-based order with a noticeable emphasis on the Indo-Pacific ‘which is open, prosperous, and inclusive’.

While there is a sensible debate on how far the UK can extend its resources to the region, a Henry Jackson Society report sought to argue earlier this year that the Indo-Pacific presents economic opportunities as well as geopolitical challenges. The region accounts for 60% of the global population and accounts for nearly two-thirds of global economic growth; it is – according to the IMF – the world’s most dynamic region by a wide margin. The decision of the UK and Australia to strengthen their track 1.5 Asia Dialogue last year recognised these dynamics.

How Australia and the UK decide to interact in the Indo-Pacific will become an essential part of the Global Britain strategy. The two states already cooperate in the Five Powers Defence Arrangements and both have growing defence and intelligence ties to Japan. Additionally, they might develop other nodes of regional cooperation, such as a potential Australia–France–UK trilateral, or the already-existing US–Japan–India–Australia Quadrilateral.

While there are serious concerns about the UK’s budgetary capabilities – witness the searing disagreement between Defence Secretary Gavin Williamson and Prime Minister Theresa May about alleged proposed cuts to defence this past June – the Indo-Pacific region does at least present economic returns. The agreement by London and Canberra to pursue an ambitious bilateral free trade agreement once the UK has left the EU and its interest in joining the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership are both opportunities, as is the budding defence industrial relationship. The recent revelation that the two signed a £20-billion deal for nine UK-designed warships might well be an indication of such returns.

As the region is set to lead global economic growth over the next 30 years, it makes sense for the UK to invest in capabilities and diplomatic reach in-region.

While distance still offsets the warmth found in the AUKMIN 2018, the fact is that working together can help both overcome this. The Royal Navy already has one base in Singapore. Perhaps basing rights might be exchanged between both navies; if successful, rights might even be extended reciprocally with the French, which have bases in New Caledonia and French Polynesia. In return, French and Australian marines may dock at British facilities in Singapore.

Another area that might be of mutual interest is that of the South Pacific. While it is a part of the world that few – if any – foreign secretaries think about, we could see this begin to change. Over the past few years, Beijing has been pouring money and developments into these tiny Pacific Island states. While development has traditionally been viewed as benign, the possibility of Chinese submarines docking at a recently built dock in Vanuatu – an island sitting on Australia’s shipping route to its ally, the US – has become a serious concern in Canberra this year. Britain’s decision to massively expand its economic and diplomatic footprint on Vanuatu, the Solomon Islands and Tonga will be warmly welcomed in Australia.

While it is true that the ‘tyranny of distance’ will keep the UK from becoming an Indo-Pacific regional power, Britain can become a significant player. There are multiple nodes of access available, including the Five Powers Defence Arrangements, the Commonwealth and the Five Eyes intelligence-sharing structure. One excellent bit of news from the AUKMIN Ministerial statement is the prospect that London and Canberra will begin coordinating much more closely on foreign direct investment into sensitive digital infrastructure, hopefully avoiding another debacle similar to that which occurred when London allowed the sale of a British data cloud centre to a Chinese consortium in 2017, causing the Australian Department of Defence to remove its data from the company.

Looking into the future, we see that the traditional picture of a US-led Western alliance confronted by Russian and Chinese authoritarianism has returned to mainstream global politics. Only this time, it is not always clear that the US will be as willing to ‘bear any burden’. This requires those great powers and middle powers to band together all the more tightly.

Jeremy S. Maxie

Energy & Political Risk Consultant

southseaconversations 讨论南海

China comments on the South (China) Sea disputes

Christopher Phillips

Academic, Writer, Commentator

tokyocooney

(does america)

Philosophical Politics

political philosophy of current events

Minh Thi's blog

pieces of me

North Korea Leadership Watch

Research and Analysis on the DPRK Leadership

TIME

Current & Breaking News | National & World Updates

Moscow-on-Thames

Sam Greene - London & Moscow

kirstyevidence

Musings on research, international development and other stuff

The Rights Angle

Francesca Pizzutelli's blog on human rights and human beings

Bayard & Holmes

If you're in a fair fight, you're using poor tactics

Grand Blog Tarkin

A roundtable of strategists from across all space and time.

Sky Dancing

a place to discuss real issues

mkseparatistreport

A Blog Focused on Bringing Policy and Chinese language Translations Relating to Separatists and Terrorism

playwithlifeorg

4 out of 5 dentists recommend this WordPress.com site

Variety is the Spice of Life

A palette of general thoughts & travel stories from all around the world

 KURT BRINDLEY

novels. poetry. screenplays. endless musings...

Top 10 of Anything and Everything - The Fun Top Ten Blog

Animals, Gift Ideas, Travel, Books, Recycling Ideas and Many, Many More

Eleanor Yamaguchi

Associate Professor at Kyoto Prefectural University and Specialist in Japanese History and Culture and UK-Japan Relations 京都府立大学文学部准教授(国際文化交流)山口 エレノア

ABDALLAH ATTALLAH

Futurist | Disruptor | Coach | Reformer

Small House Bliss

Small house designs with big impact

Europe Asia Security Forum

European perspectives on Asian security, and vice-versa

Shashank Joshi

The Economist

secretaryclinton.wordpress.com/

A PRIVATE BLOG DEVOTED TO FOREIGN POLICY & THE SECRETARY OF STATE

Adventures in (Post) Gradland

Thoughts on life after the PhD

springdaycomedy

Just another WordPress.com site

James Strong

Junior academic working on British foreign policy

Justice in Conflict

On the challenges of pursuing justice

Sino-NK

Sino-NK is a research website for Sinologists and Koreanists.

Iconic Photos

Famous, Infamous and Iconic Photos

China News

News and Feature Articles About China

The Strategist

Analysis of top regional issues from the research team at the Near East South Asia Center for Strategic Studies. Please note that the views expressed on this blog do not represent the official policy or position of the National Defense University, the Department of Defense, or the U.S. government.