Victorian Premier Daniel Andrews last year asked the Chinese government to set up a technology research and development centre in Melbourne, prompting warnings about intellectual property theft and the potential national security implications.
Mr Andrews’ request for a so-called “torch centre” to be set up in Melbourne was part of his attempt last October to court Chinese investment and which saw him describe Victoria as “China’s gateway to Australia”. The offer was made in a letter sent last year to China’s Minister for Science and Technology, Wang Zhigang, and followed up in person in a meeting between the Premier and vice-minister Huang Wei in October last year.
Torch centres in China bring together universities and high-tech start-ups with the aim of fostering innovation. They have been crucial to China’s rising fortunes since 1988 and the Chinese government credits them with contributing almost half of China’s patents and 11 per cent of its gross domestic product. The University of NSW already hosts such a centre, but risk analysis group Foreign Brief says they have also been linked to China’s potential acquisition and development of “grey area” technology that could include military use.
A briefing prepared for Mr Andrews ahead of his meeting with China’s most senior science and technology officials in October, 2019, said the Victorian government “welcomes the establishment of a torch centre in Melbourne and is ready to work with [the ministry] to explore how this can be achieved”.
“Victoria is proud to have signed a Belt and Road agreement with China. Victoria is ready to make tangible progress under the MoU and we would like to take the opportunity to explore practical measures of collaboration with the ministry,” Mr Andrews wrote in his letter to Mr Wang.
Torch centre overseas facilities “assist Chinese technology companies in establishing their presence in foreign markets,” the briefing said, adding that, under a proposed Cooperation Agreement, the “complementary research and innovation capabilities” of China and Victoria would increase commercial opportunities through research and development.
Mr Andrews’ desire for a high-tech Chinese presence in Melbourne is detailed in dozens of pages of documents about Victoria’s Belt and Road Initiative dealings that have been released by the Premier’s Department under the Freedom of Information Act.
But South Australian independent senator Rex Patrick said Victoria’s offer looked “remarkably naive” in the context of China’s history of intellectual property theft, and a former head of China analysis at Australia’s Defence Department, Paul Monk, said he was worried about Australia being pulled into China’s “sphere of influence”.
Australia has welcomed Chinese investment over many years, but strong debate has arisen in the past two years over questions of Communist Party influence, particularly around President Xi Jinping’s Belt and Road Initiative, which is increasingly seen by its critics as an instrument of China’s foreign policy.
Prime Minister Scott Morrison has promised to legislate to give him the power to tear up agreements between states and foreign powers, but Mr Andrews has seen the Belt and Road agreement as a creator of jobs in Victoria, with a particular focus on transport infrastructure such as the Suburban Rail Loop and manufacturing, such as the controversial high capacity trains.
On Friday he said, “I think a strong relationship and a strong partnership with China is very, very important.”
In 2016, the University of New South Wales became the first institution outside of China to establish a torch centre through a $100 million partnership with the Chinese Ministry of Science and Technology.
The deal was signed with the approval of the Turnbull government, but it attracted strong criticism from security analysts in Australia and the United States because the Chinese government was able to direct the university about which companies it was to work with, including Chinese technology giant Huawei and several others whose technologies may have had military use.
Australian security and intelligence agencies have repeatedly advised the federal government to block Huawei from involvement in the rollout of the National Broadband and 5G networks on security grounds.
Another collaboration had the UNSW Torch Centre working with researchers from China’s University of Defence Technology. UNSW vice-chancellor Bryan Boyle said in 2017 the university “goes to great lengths to work within Australian government regulations to ensure our national security is protected”, and that “all of our work satisfies the Commonwealth Defence Trade Controls”.
Former head of China analysis at Australia’s Defence Department, Paul Monk, said Victorians deserved more transparency from Mr Andrews about his Belt and Road dealings with China, in particular proposals for official Chinese government projects in Melbourne.
“People will say other countries do comparable things with technology and research collaboration like the Americans, British or Israelis and that’s true. But the objection to China is based not on racism but regime grounds,” Mr Monk said.
“This is an increasingly aggressive and disturbing regime that will attempt to use the Belt and Road to subordinate us to its sphere of influence and detach us from the US alliance. To think otherwise is wilfully blind.”
Senator Patrick said the FOI documents revealed an “extraordinary case of a state government pursuing a shadow foreign and trade policy, quite separate and independent from the federal government”.
“The Victorian government’s enthusiasm to enmesh Chinese state-owned enterprises with the Australian economy – including critical infrastructure and virtually every area of Australian technological excellence – is particularly striking,” Senator Patrick said.
“Given the widespread evidence of industrial scale, state sponsored and directed intellectual property theft by China, the Victorian government’s interest in the Chinese Ministry of Science and Technology establishing a so-called ‘Torch Centre’ in Victoria at best looks remarkably naive.”
Mr Andrews’ October 2019 China trip also involved his presence at a signing ceremony to extend a cooperation agreement between Melbourne’s Monash University and the Commercial Aircraft Corporation of China (COMAC).
The Age and The Sydney Morning Herald earlier this year revealed concerns about this partnership within senior levels of the federal government due to concerns COMAC had engaged in alleged industrial espionage in its bid to rival Boeing and Airbus as a producer of commercial jets.
Cyber security firm CrowdStrike reported in 2019 that industrial espionage linked to COMAC included cyber-attacks, forced technology transfer and theft from global component suppliers.
COMAC’s agreement with Monash will lead to a new research and development centre at Monash’s Clayton campus geared towards advanced manufacturing, artificial intelligence and robotics.
Monash has defended the China partnership, saying research collaboration with international partners were subject to strict rules.
By Richard Baker
How Dan Andrews is allowing a Chinese company which was blacklisted by the US over security fears and is part of Beijing’s Belt and Road Initiative to build Melbourne’s new trains
A Chinese company which was banned in the US over security fears and tied to the nation’s Belt and Road Initiative will build Melbourne’s new trains.
CRRC Changchun Railway Vehicles won the bid to build 65 new high-capacity metro trains in 2016, just a week before Premier Daniel Andrews travelled to China.
Mr Andrews then went on to strike a deal with the communist country under the Belt and Road Initiative, which allows China to invest in huge infrastructure projects around the world.
Manufacturing company CRRC has been identified as a potential cyber-security threat by the US Defence Department because of its involvement in critical infrastructure, The Age reported.
A report from the Australian Strategic Policy Institute in March also found the manufacturer is one of 82 companies benefiting from the use of Uighur workers.
CRRC was launched in 2015 and employs about 180,000 workers at more than 40 subsidiaries. The company made more than $44billion in 2018.
The train program is more than 18 months behind schedule. CRRC was chosen ahead of local manufacturers.
Mr Andrews maintains Victoria’s Belt and Road deal, along with many others the state has with China, is ‘all about jobs’.
Chinese companies which have been investing in Victorian projects such as the Metro Tunnel have been employing tens of thousands of local workers, he said.
The leader stressed that doesn’t mean he is turning a blind eye to China’s human rights record.
‘We don’t agree with China on everything,’ Mr Andrews told reporters in June.
‘But if you want a good trading relationship, if you want to send more Victorian-made product to China, to create jobs here in Victoria, then a good relationship on the things you can agree on is very, very important.’
CRRC has built trains for Boston, Chicago and Los Angeles but faces increased scrutiny in the US.
The manufacturer was identified on a list of Chinese companies working in the US with close links to the Chinese government created by the US Defence Department.
Those on the list could face emergency economic powers and sanctions by the US president.
Daniel Andrews’ deal with China
In October 2018, the Victorian Labor government signed a memo of understanding with China under the country’s Belt and Road Initiative.
The BRI is a Chinese plan to establish maritime trade routes and invest in infrastructure projects around the world.
More than 170 memos of understanding have been signed with 125 countries.
Premier Andrews said he wanted to increase Chinese participation in Victorian building projects, manufacturing, and trade.
In October 2019, Mr Andrews reached a ‘framework agreement‘ with China that vowed to make a roadmap for cooperation on specific initiatives.
So far the roadmap has not been published.
Critics say the BRI is a tool to expand influence and power across the globe.
Federal Liberal MP Andrew Hastie told Daily Mail Australia that Mr Andrews had ‘gone off the reservation by conducting his own foreign policy with China’.
As trade tensions with China mount, Mr Andrews has been urged to scrap the agreement, which he claims creates jobs for Victorians.
Michael Schoebridge of the Australian Strategic Policy Institute, said: ‘The Victorian government’s BRI activities are simply out of step with the new international and economic environment, including the now openly coercive directions that Beijing is taking with Canberra over trade and in government relations.’
Victorian Labor senator Kimberley Kitching, chair of the Senate Foreign Affairs Defence and Trade References Committee, said: ‘The Victorian government should not have entered into an agreement with the Chinese government on the Belt and Road Initiative – it is bad policy and bad optics.’