The think tank behind Australia's changing view of China

On Tuesday in the Australian Senate, Labor's Kim Carr rose to his feet, thundering about "hawks intent on fighting a new cold war". In his sights was the Australian Strategic Policy Institute, which he said was taking nearly $450,000 from the US State Department (ASPI says the true figure is less than half that amount) to track Chinese research collaborations with Australian universities, "vilifying and denigrating" Australian researchers and their work.

It's not the most vehement denunciation of ASPI on the public record. Only the most recent.

Over the past five years, the Canberra-based think tank has come to dominate the Australian public‘s understanding of China’s rise. It has staunch supporters, many in Parliament, who credit it with raising issues such as Chinese military involvement in Australian universities, the spread of Uighur detention camps in Xinjiang, and the recent and contested defection of a Chinese intelligence agent.

But ASPI, which is funded by the Department of Defence, foreign governments and military contractors, has also been accused of fomenting anti-China hysteria, to the alleged benefit of its benefactors.

Former NSW premier Bob Carr has accused it of pumping out a “one-sided, pro-American view of the world”. Veteran foreign editor Tony Walker has slammed its "dystopian worldview" which "leaves little room for viewing China as a potential partner". "It lacks integrity and brings shame to Australia," says retired former DFAT chief and ex-Qantas CEO John Menadue. “I see it as very much the architect of the China threat theory in Australia”, adds ex-ambassador to China turned Beijing-based business consultant Geoff Raby.

The rhetoric is extreme. And says much about how Australia’s consensus on China has dissolved.

Until recently, "both the United States and China have been status quo powers", says Allan Gyngell, who was from 2009 to 2013 the director-general of the Australian Office of National Assessments, advising the prime minister on intelligence issues. Both superpowers are now dissatisfied with the prevailing global order.

There is disagreement on how Australia should react. Some hold that Australia should tread a middle path. By instinctively clinging to the US alliance, some fear Australia is adopting its tendency to view China as a strategic competitor, and failing to consider what may be more in keeping with our long-term interests.

But for many, it is China's shift that has been the most alarming. In 2012, Xi Jinping ascended to the leadership of the Communist Party of China. His government tightened social control and adopted a more assertive foreign policy. In 2014, China stepped up its militarisation of disputed islands in the South China Sea. Australia's intelligence agencies now warn of Chinese interference in Australian institutions.

The previously easy acceptance, in both business and diplomatic circles, of Australia's growing economic engagement with the nation that more than any other has ensured our own prosperity has been shattered.

Into this maelstrom, ASPI is a lightning rod. The way ASPI's executive director Peter Jennings sees it, the organisation has "gotten in the way of the rivers of gold": the swelling two-way trade of $235 billion a year that makes China by far our biggest trading partner.

ASPI was founded in 2001 in a bid to end the situation in which defence was "one of the last areas of policy where there was no sustained contest of ideas between the bureaucracy and experts outside it", said its inaugural director Hugh White in 2016. The Howard government seeded the funding, provided through the Department of Defence.

This is the mainstay of ASPI's budget, and will remain so until at least 2022-23, when the current $4 million anuual funding agreement expires. Defence's role is reflected in ASPI's board, which is chaired by Kenneth Gillespie, a former chief of the Australian Army.

But ASPI has always had a mandate to develop alternative sources of funding. These other sources have grown far faster than its funding from Defence, meaning in the most recent financial year it accounted for a record-low 43 per cent of ASPI's $9 million total budget.

ASPI's annual reports list alternate funding sources. Sponsors from its most recent can be divided into three buckets.

The first is filled with defence contractors such as Lockheed Martin, BAE, Northrop Grumman, Thales and Raytheon. The second, technology companies like Microsoft, Oracle Australia, Telstra, and Google. And lastly, there are the contributions from foreign governments, many being strategic competitors to China, including the Embassy of Japan and the Taipei Economic and Cultural Office (that is, Taiwan).

Growing funding

The Foreign Influence Transparency Scheme, set up to monitor Chinese government influence in Australia, ironically captures some more recent sources of ASPI funding, including NATO, the US State Department and the UK Foreign and Commonwealth Office.

This growing funding has allowed the establishment of a range of new initiatives, including a growing focus on China through the formation of its International Cyber Policy Centre in 2013, which today employs most of its China-focused analysts.

The centre's output is impressive. Its Picking Flowers, Making Honey report charted the Chinese military's collaboration with foreign universities including many in Australia. Its findings informed an episode of ABC prime-time investigative powerhouse Four Corners.

Another investigation, Mapping Xinjiang's 'Re-education' Camps', used satellite imagery to show the massive growth of camps used to detain Uighurs, and attracted wide coverage. And another, on China's technology giants, has been regularly consulted by the Western press to understand state censorship and control as exercised on Chinese social networks.

Another recent analysis, on DFAT's digital capabilities, was notable for its key author: now-Liberal member for Wentworth Dave Sharma. More recently, ASPI's Alex Joske was a bylined contributor to Nine's coverage of alleged Chinese defector Wang Liqiang, whose revelations drew fervent attention in the recent Taiwanese election. Joske's role was conducted in the course of his employment as a casual researcher by The Age newspaper, but dove-tailed and intersected with his work at ASPI.

ASPI's influence comes partly from this deep engagement with the media. Few publishers have the resources and expertise to tackle these issues, despite their importance.

One of our focuses has been to make a more prominent debate around national security issues, in the same way we discuss economic issues.
— Peter Jennings, executive director, ASPI

Making the discussion more accessible, says Jennings, is the point. "When ASPI was created, frankly, defence was a page 9 story," he says. "There wasn't a great deal of in-depth coverage.

"One of our focuses has been to make a more prominent debate around national security issues, in the same way we discuss economic issues."

He has no interest in running an “ivory tower institution engaged in pure academic research. We’re in the business of public policy, and we need to be able to bring important issues of public policy to the attention of policy makers in ways that are helpful to the country."

ASPI founder Hugh White, now professor of strategic studies at the Australian National University, says this visibility shouldn't be overstated. ASPI is "certainly very present in the debate", he says. "But there’s a difference between being present and being influential."

Issues like the ban on Huawei's involvement in Australia's telecommunications infrastructure originated within Australia's intelligence agencies, White says. And while some backbenchers may be close to ASPI, the stances of Prime Minister Scott Morrison or Foreign Minister Marise Payne show their supreme caution and discipline in managing the China relationship.

This could be argued to demonstrate ASPI's independence. Its analysts and researchers – who are not monolithic in outlook but usually lean on the hawkish side of consensus – usually chide the Australian government for not being more robust in its responses to China, rather than echo ministerial talking points.

On the issue of ASPI's funding, views diverge.

It is an unavoidable truth that all think tanks have to be funded from somewhere. All funding poses risks, both operational and reputational. ASPI, to its credit, has always been relatively transparent on whose support it relies, and makes much of its high research standards, designed to avoid undue influence.

When it comes to the Department of Defence, Jennings says the organisation is "remarkably arm's-length".

"We were designed to have a remarkable degree of independence in the topics we choose to write on, and in content and editorial judgments of what we say."

This is White's experience too. "When I was running ASPI, it was more or less 100 per cent funded by Defence," he says. "And I never had even the suggestion that the government or Defence was trying to direct us in what we said."

This was put to a hard test. "Almost the same month ASPI started operation, the issue of whether Australia should support the United States in invading Iraq came on the agenda. As director, I was critical. I thought it'd be a bad idea.

"John Howard never suggested to me, and neither did anyone else, that the position I was taking as director of ASPI was inappropriate.

"I don’t think there is something inherent in government funding that means you can’t be independent. I don’t have a problem with that – it just requires careful management and constant vigilance."

On funding from defence contractors, White does beg to differ. A few years ago, ASPI was best known for its work on evaluating the military budget, which is still a key part of its output. White believed, when he was in charge, that this was incompatible with taking cash from the companies the military buys things from.

On the issue of public funding, some point out that smart influence operations don't need to direct their agents. They just need to fund the work of people who they know will, in most cases, agree with their broad aims. The Department of Defence benefits in funding and importance from an arms race. So does the US military-industrial complex, another plank of ASPI's budget.

"Think of how insidious that is," says Raby, a former ambassador to China. "When the US wages a war, the military industrial complex benefits.

"Public money shouldn't be put into public advocacy anyway," Raby adds. "Objective, balanced, nuanced research is acceptable, but not to fund advocacy of one country’s position vis-a-vis China."

Gyngell – who before his work at ONA was the founding executive director of the foreign-affairs focused Lowy Institute and retains links to several other China policy think tanks – questions if public funding makes claims of independence self-defeating.

"If [ASPI] had no funding from governments it would be a case of the more voices the better," he says. "But the sources of funding inevitably give its words a certain, and greater, weight.

"The funding link may not be widely known about in the general public. But to those in the academic community, or to people in other governments, including China's, the association is well known."

Quite aside from the question of independence, another plank of criticism hints at the existence of a deep-seated cultural appetite in Australia for hawkishness on China. Many don't need much nudging to believe the worst of China and its people. Concerns about xenophobia appear to underlie some of the alarm over public discussion of such issues.

But it is difficult to deride ASPI's work on China as racist or xenophobic. Its China analysts have devoted years of their lives to understanding it. And around half of its research staff who work on Chinese issues are Chinese-Australian or of Chinese heritage.

While many Chinese-Australians are wary of criticism of China, others who share their heritage are alarmed by its authoritarian turn. In public forums, ASPI analysts are often the only Asian faces discussing the growing global assertiveness of China and how Australia should react.

"We don't have an editorial line on China," says Jennings. "But we have looked at national security risks. There are some areas – Canberra policy-making communities, parts of the business world, and universities – where that is not the general view."

This causes disagreements. But Jennings doesn't view that as a bad thing.

“National security issues, even as little as 10 years ago, were discussed inside the beltway, by specialists and inside the public service … I find that a much less healthy approach to no-holds-barred debate.

"Australia is big and mature enough to be able to handle differences of opinion. How Australia manages China is going to be the story of our generation. It’s a vital discussion, and the more it's in public ... the better.”