China's Exploitation of Civilian Channels for Military Purposes in New Zealand
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Holding a Pen in One Hand, Gripping a Gun in the Other July 2020 China’s Exploitation of Civilian Channels for Military Purposes in New Zealand By Anne-Marie Brady, with Jichang Lulu and Sam Pheloung In 2017, a Chinese military company proudly announced production of an innovative cargo drone, marketed as suitable as an armed one-use military cargo plane which could drop off supplies in difficult mountainous terrain.1 China’s contested mountainous border with India would be one such location. The plane’s technology originated from a well-known New Zealand company that had once been owned by New Zealand taxpayers. The tech- nology had been transferred in a deal that was endorsed by the 2008-2017 New Zealand National Party government. Praising the BAIC-Pacific Aerospace partnership in 2014, then Minister of Trade, Tim Groser, remarked—without any trace of irony—“Relationships like this demonstrate that we don’t just export dairy and lamb to China, but also our tech- nology.”2 New Zealand has indeed increasingly been exporting our innovative and sensitive tech- nology to China. As this paper outlines, some of these exchanges appear to breach our domestic laws and international commitments. The People’s Republic of China (PRC) is using civilian links with Western countries to access cutting-edge scientific expertise with military-end-use. China’s exploitation of civilian channels for military purposes raises national security, as well as reputational, ethical, and intellectual property risks for New Zealand. New Zealand’s experience of grappling with China’s covert military links may be relevant for other nations as they too re-assess their scientific, commercial, and educa- tional relations with the PRC. Photo: Kenzaburo Fukuhara/Pool Photo via AP
Holding a Pen in One Hand, Gripping a Gun in the Other Key Points • The People’s Liberation Army’s (PLA) rapid militarisation program is accelerating via an international technology transfer strategy, which includes academic exchanges, investment in foreign companies, espionage, and hacking. Scientists work globally, so by accessing universities or tech companies in states with an advanced technology sector like New Zealand, the PLA can get a foothold within the international network of scholars working on a given subject area. • New Zealand commercial and educational links with PLA-affiliated organizations and individuals raise national security, as well as reputational, ethical and intellectual property risks. Some of these links potentially breach New Zealand’s international commitments and domestic laws. • The COVID-19 crisis provides New Zealand with an opportunity to reassess relations with China, and set better boundaries around problem areas. China’s aggressive foreign and military policy, disinformation activities and cyber attacks threaten New Zealand security. China is the main source of cyber attacks against New Zealand. • In the words of Mao Zedong, the CCP under Xi Jinping is “holding a pen in one hand and gripping a gun in the other,”3 it is preparing China for what the Chinese leadership believes is an inevitable war. New Zealand entities should not be assisting in the strengthening of China’s military capacities. The New Zealand government needs to work with businesses and universities to devise a strategy to prevent the transfer of military-end-use technology to China. Executive summary How can we stop our companies and universities from being used to boost China’s military development? This is the question many governments around the world are grappling with, and now New Zealand is too. The Chinese Communist Party (CCP) government has promoted the merger of military-civil relations in order to expand its defense sector and leap-frog ahead in technology. The General Secretary of the CCP, Xi Jinping, declared China’s new military-civil fusion policy in March 2015. Official documents issued in December 2017 codified the strategy.4 Many foreign universities, research institutes, and corporations who partner with Chinese entities have been unwittingly drawn in to the PLA’s technology transfer project. The New Zealand government’s stance on the transfer of military technology and informa- tion is clear. As a signatory to the Wassenaar Arrangement as well as several other non-pro- liferation treaties, New Zealand has made an obligation not to export military or dual use technology to any nation that is not also a signatory to these agreements.5 China is not a member of the Wassenaar Arrangement.6 The Wassenaar Arrangement on Export Controls for Conventional Arms and DualUse Goods and Technologies entered into force on 1 November 1996. 41 states are members including Argentina, Australia, Canada, Croatia, Japan, the Republic of Korea, Mexico, New Zealand, Norway, Russia, South Africa, Switzerland, Turkey, Ukraine, the United States, and all EU states (except Cyprus). The objective of the Wassenaar Arrangement is to “prevent destabilizing accumulations of arms by establishing effective and reliable national export controls and to improve transparency in the export of conventional 2 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other weapons and dualuse goods by agreeing on Until the COVID-19 pandemic, the PRC was reporting duties.”7 In signing on to this agree- also New Zealand’s largest market for foreign ment New Zealand must, through its own students, largest tourism market, and sixth national policies, make sure that the terms largest foreign scientific research partner.17 of the agreement are upheld and it is their New Zealand signed a Comprehensive sole responsibility to ensure that they adhere Cooperative Relationship Agreement with to those policies.8 China in 2003 and a Comprehensive Strategic Partnership Agreement in 2014.18 New Zealand is also a signatory to the Arms Trade Treaty,9 and in 2018, passed legisla- New Zealand receives significant economic tion to regulate the brokering of weapons benefits from the China relationship, but and related items.10 Yet current legislation it also brings serious national security appears to be insufficient to deal with the concerns. The New Zealand government has broad means that the CCP government is publicly acknowledged that China’s Ministry employing to access strategic technology of State Security (along with Russian military and information, as well as the national intelligence, and North Korean-organizations) security, ethical, reputational, and intellectual has launched malicious cyber activity against property risks of these connections. New Zealand on numerous occasions.19 What the New Zealand government does The People’s Liberation Army’s (PLA) interna- not publicly state, but which cyber experts tional technology transfer strategy includes confirm: China is the main source of nation- international academic links,11 investment state cyber attacks against New Zealand. in foreign companies,12 espionage and The 2019 cyber attack on health providers in hacking,13 and ultimately, elite capture. The the wider Wellington region, which affected PLA benefits from talent-scouting initiatives more than a million New Zealanders, such as the CCP Organization Department’s demonstrated that the cyber risk to the New Thousand Talents Plan (千人计划), which has Zealand government is about more than poured billions of dollars into drawing in tens state secrets.20 China was the chief suspect of thousands of foreign specialists to China in the attack. The private information avail- and sends out thousands of Chinese scien- able on health files could be used by China tists overseas to access the latest technology to blackmail prominent individuals. It could and knowhow.14 The CCP’s military-civil also be used to establish a profile on people fusion strategy has helped the PLA acquire in Wellington who have security clearance, a variety of innovative technologies ranging to determine their personal habits, health from next generation fighter jets, advanced weaknesses, home addresses and phone missile systems, and foundational technolo- numbers.21 gies such as Artificial Intelligence (AI).15 In addition to sustained cyber attacks, the CCP The PRC is currently New Zealand’s largest government has targeted New Zealand— export market, absorbing close to 30 percent along with other nations—with a concerted of all exports. More than 50 percent of political interference effort. The New Zealand New Zealand imports come from China. Parliament Justice Select Committee held Economists classify trade dependency as a one year Inquiry into Foreign Interference being 50 percent dependent on one source. from 2018-2019, leading to the passing of New Zealand is dependent on the PRC for new legislation on electoral financing.22 In 513 categories of goods, and 144 of them testimony to the Inquiry, Director-General have applications in critical infrastructure.16 of Security NZSIS, Rebecca Kitteridge, high- 3 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other lighted foreign interference via the vector of ground station at Waihopai, which forms part “relationship-building and donation activity of the Five Eyes network of signals intelli- by state actors and their proxies”. She said gence. “This activity spans the political spectrum A New Zealand academic who was present and occurs at a central and local govern- at one of the functions on board the ment level.”23 In late 2019, the Committee PLA-Navy vessel during the port stay, said he announced a second inquiry, focused on was there because it was an “opportunity” political interference into local government, to observe the “theatre of shifting power.”26 including matters of cyber security. This The COVID-19 crisis provides New Zealand paper seeks to add further information to with another “opportunity:” to reassess our that inquiry, and to assist in New Zealand relationship with China, and to set better government deliberations about how to deal boundaries around problem areas within the with China’s efforts to access military-related relationship. technology and knowhow from New Zealand enterprises and universities. This paper focuses on a swathe of covert Chinese military links with New Zealand CCP political interference activities draw on entities, many of them facilitated via New the resources of the Party, the Chinese state, Zealand’s science diplomacy with China. the PLA, and the private sector in China, as The majority of New Zealand-China scientific well as Chinese companies abroad—what partnerships are benign. However, some I refer to in toto as the Party-State-Military- New Zealand-China educational and industry Market nexus. As this paper demonstrates, linkages are with PLA-affiliated organizations the risk factors in New Zealand-China rela- and involve projects with military-end-use tions feature all aspects of that nexus and application. Seemingly benign PLA-New the close co-relationship between all four. Zealand links have also led to military-end-use Separate from the covert PLA activities related activities. Some of China’s corporate outlined in this paper, New Zealand does activities in New Zealand connect back to have official military exchanges with China. military interests. New Zealand taxpay- Formal New Zealand Defence Force-PLA er-funded research supports many of these links stepped up in 2012 as part of New non-official New Zealand-China military links. Zealand’s China Strategy, launched in the PLA institutions, including PLA-affiliated and same year. In 2014, the former head of the linked universities, work closely with non-mil- NZ Defence Force’s International Defence itary universities and companies in China. Relations wrote, “New Zealand does not Through their contacts abroad, Chinese intend to place all its military relationship eggs universities and companies provide a channel in a single ‘Five Eyes’ basket. Diversification that permits the PLA to benefit from research of military links makes absolute sense in a conducted outside China. Most of New fluid strategic environment.”24 In 2019, a Zealand’s universities have partnerships with PLA-Navy training vessel conducted unan- Chinese universities linked to the PLA. These nounced training exercises in New Zealand’s range from the PLA Institute of Military internal waters, the Cook Strait, then paid a Culture (Massey); the National University five-day courtesy call in Wellington hosted by of Defence Technology (Auckland, Massey); the NZ Defence Force and Victoria University North-western Polytechnical University of Wellington’s Confucius Institute.25 The (Canterbury), Shenyang Aerospace University visit may also have been used to intercept (UNITEC), to Xidian University (Otago, VUW). communications at New Zealand’s satellite 4 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other New Zealand academics supervise doctoral commented to LA Times journalist Jim Mann students working at PLA-linked universi- that from the mid-1980s, 60 to 70 percent ties and students who have come from of the U.S.-China relationship was based on such institutions to study in New Zealand, an arms sale relationship. Other U.S. officials and they host graduate students and staff admitted that China’s interest in obtaining currently working at PLA-affiliated institu- U.S. military technology was one of the tions on short term fellowships. Some New driving forces in the developing ties between Zealand academics have joint appointments the United States and China in the 1980s.33 or advisory roles at PLA-linked universi- After the violent crackdown on the pro-de- ties.27 Several New Zealand universities and mocracy movement in China in 1989 and the companies have strategic partnerships with end of the Cold War in Europe, the EU and Chinese companies such as Iflytek, Huawei, United States put bans in place on military and Kuangchi Science who work closely technology sales to China. However, after with the Chinese military and state security intense lobbying by former U.S. Secretary sector.28 Several PLA-linked universities have of State Henry Kissinger, among others, the set up alumni associations in New Zealand29 United States eased sanctions to allow sales which are used to draw in former staff and of civil-military use technology.34 China turned students to contribute to the PLA’s modern- to Israel and post-Soviet Russia to purchase ization as well as participate in CCP united military equipment, and continued to acquire front work/political interference activities. military technology from the United States This paper details a representative sample of where it could,35 but the long-standing goal these connections and puts forward sugges- was self-sufficiency. tions for what the New Zealand government should do to deal with the problem. China has followed an increasingly assertive foreign policy under Xi Jinping, but even more The PLA’s International Military so since the 19th Party Congress when Xi Modernization Program and New announced that Chinese politics had entered Zealand a “New Era.” The COVID-19 pandemic has strengthened the relative hard power of the The PLA is moving from becoming a land- People’s Republic of China. The Chinese mili- based military to a multi-faceted global tary has taken advantage of the weakness military force, capable of projecting China’s of other states to assert its position in the power well beyond its borders. China’s mili- South China Sea, India, and Taiwan with tary modernization has always been reliant shows of force. China’s cyber-attacks against on foreign technology, In the Mao years, Taiwan and other vulnerable states have the CCP government could only purchase also increased. China’s political interference weapons from the Soviet Union. In the Deng against various foreign governments’ activ- years, from the early 1980s, China was able ities have become increasingly brazen. Xi to purchase technology ranging from French Jinping has frequently said that China must submarines30 to U.S. nuclear technology.31 prepare for war. Under Xi, the PLA has gone The U.S. rationale for this was that it would from being a land-based defensive force to help keep the PRC out of the Soviet orbit one optimized for warfare. In the light of and encourage China to expand its ties with these developments, many countries are major industrialized democracies.32 In 1991, reassessing their relations with China and a senior U.S. Department of Defence official seeking closer partnerships with like-minded states, New Zealand among them. 5 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other China aspires to become a global military Plan recruits top foreign and Overseas power with fully self-sufficient air, land, and Chinese experts to affiliate with universities sea forces.36 The current plan is to reach in China, by offering them lucrative financial 70 percent self-sufficiency in high-tech rewards.42,43 In January 2018, the prestigious industries by 2025 and continue that trend Nature journal published a paid content up until 2049, the hundredth anniversary article about the Thousand Talents Plan, of the People’s Republic of China.37 China’s which stated, “All successful applicants can military scientific capacities have devel- expect a 1 million yuan (US$151,000) starting oped significantly since the Deng years, bonus, and the opportunity to apply for a assisted by a generous research and devel- research fund of 3–5 million yuan. Foreign opment program. Hundreds of thousands of scientists receive additional incentives, such Chinese scientists have been sent abroad as accommodation subsidies, meal allow- to acquire the latest military-related tech- ances, relocation compensation, paid-for nology. Chinese scientists have also long visits home and subsidized education costs. used reverse engineering and espionage Employers are also obliged to find jobs for to speed up innovation. Until recently, PLA foreign spouses, or provide an equivalent equipment was assessed as low tech and local salary.”44 What was not mentioned, is lagging behind that of other major weap- that copyright for any research connected ons-producing states. However, in the last with the program is required to be regis- ten years, the PLA’s military modernization tered in China, even if it is part of a research program has accelerated. China now leads program funded elsewhere. the world in a number of new military fields In October 2018, a few months after the and is close to being on a par with the United U.S. government raised concerns about the States in some domains. Thousand Talents Plan, Chinese government In March 2015, Xi Jinping announced China’s and university sites removed public infor- new military-civil fusion policy, which built on mation about the program, including lists the military-civil integration strategies of the of scholars affiliated with it.45 Nonetheless, Hu Jintao era.38 Official documents issued Thousand Talents continues,46 as do around in December 2017 codified the strategy.39 200 similar recruitment plans aimed at trans- In 2017, China also passed a new National mitting foreign research expertise to China. Intelligence Law, which states: “All organi- A 2019 U.S. Senate Report highlights the zations and citizens shall support, assist and concerns with this activity: “China unfairly cooperate with national intelligence efforts... uses the American research and expertise [China’s national intelligence organizations] it obtains for its own economic and mili- “may demand that…organizations and citi- tary gain. In recent years, federal agencies zens provide necessary support, assistance have discovered talent recruitment plan and cooperation.”40 Since 2019, China’s ICT members who downloaded sensitive elec- companies are now required to host govern- tronic research files before leaving to return ment officials who will help out with “project to China, submitted false information when implementations.”41 applying for grant funds, and willfully failed to disclose receiving money from the Chinese In 2008, the CCP Organization Department government on U.S. grant applications.”47 A launched the Plan to Attract Overseas High- 2018 Chinese study found that more than level Talent (Thousand Talents Plan) 海外高 7000 foreign experts had been recruited to 层次人才引进计划, expanding it in 2011 to work for the Thousand Talents Plan, most include foreigners. The Thousand Talents 6 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other of them, from the United States, however different state-owned commercial and finan- this is believed to underestimate the true cial institutions as well high-tech industrial figures.48,49 parks, while still continuing their original roles in their home countries.58 Between The China Association for International getting PLA-backed Chinese experts into Exchange of Personnel (CAIEP) is a front overseas institutes and bringing international group for State Administration for Foreign experts to China, the PLA has gained access Experts Administration (SAFEA) which to some of the most advanced research in formerly ran the Thousand Talents Program.50 the world to use for their military develop- CAIEP recruits foreign scientists, academics, ment. engineers, and other experts to support China’s military modernisation.51 In 2018, One of the PLA’s core goals has been to SAFEA was merged into China’s Ministry improve their ability to conduct anti-ac- of Science and Technology and the foreign cess, area denial, and power projection talent recruitment program was given addi- within China’s sphere of influence in the tional resources.52 CAIEP has been active in Asia-Pacific.59 The PLA technology transfer New Zealand since 2014.53 strategy is one of the main reasons for the PLA Air Force’s recent technological The PLA also uses academic events, such as advancements.60 Chinese theft of plans for Horizon 2020,54 to gain access to international the F35 fighter jet allowed the PLA to create military technology. A program called Project the FC-31 Gyrfalcon.61 Chinese hackers 111 recruited 1000 academics doing dual-use stole top secret information on submarine research from the top 100 universities in warfare from an American Navy contractor.62 the world.55 The Shenzhen government runs China aspires to become a world leader in the Peacock Plan 孔雀计划,56 which seeks AI by 2030.63 Partnerships between China’s to attract global talent ranging from Nobel State-run enterprises and defense conglom- Prize winners and winners of other major erates are conducting research into how academic prizes, senior executives of the civilian foundational technology such as world’s top 500 companies or of international AI and big data can be used for military financial organizations, members of the purposes.64 International Standardization Organization (ISO) Standards Committee, university pres- Since the announcement of the military-civil idents, heads of academic associations such fusion policy, China has sent out thousands of as the Royal Society, foreign experts who students to overseas universities to conduct have won a Friendship Award, editors of civilian research that is repurposed for mili- leading scientific journals, actuaries, medical tary use.65 PLA researchers sometimes go specialists, and Olympic coaches. New to great lengths to obscure their connections Zealand academics and experts—from AI to the military. This can mean changing the specialists, to an expert on war reporting— names of their institution, claiming to be have been invited to join China’s foreign from a different non-military institution from talent programs. the same region, or omitting their military studies from their academic record.66,67 The PLA is a major beneficiary of China’s international talents programs.57 Foreign The PLA is also using Chinese corporations researchers have been added in to projects to develop new foundational technologies such as the National Key Innovation Projects, that assist in the development of the next National Key Laboratories, and a variety of generation of weapons systems.68 Despite, 7 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other legal restrictions on accessing strategic tech- New Zealand and PLA-affiliated researchers nology, Chinese corporations have been able also exchange information that has dual mili- to purchase or acquire shares in Western tary and civil use via doctoral supervisions technology companies whose products have and visiting fellowships. The China-New both civil and military application.69 Zealand scholar exchange scheme is adver- tised in PLA-affiliated universities,76 as well China is also using espionage to acquire as other universities in China, and partici- information that cannot be bought or learned pants from some of the PLA-linked univer- from overseas sources.70 Military grade sities listed in this paper have participated in technology such as M60 carbon fiber, micro- that exchange. chips, and jet engine parts are being smug- gled to China.71 Chinese cyber espionage is Scientists work globally, so by accessing on the rise,72 and it has been used to aid the universities or tech companies in states PLA’s military modernization program.73 with an advanced technology sector like New Zealand, the PLA can get a foothold Public research on the PLA’s military-civil within the international network of scholars technology transfer policies has focused on working on a given subject area. Foreign Australia and the United States, both of them university degree programs can provide nations with a large tertiary and industrial cover for PLA sleeper agents, enabling them sector. However, even small states such as to launch from there to the United States, New Zealand are being targeted by the PLA’s UK, or other states. Similarly, a Chinese military-civil fusion strategy. Using Scopus, company’s purchase of a New Zealand tech- Alex Joske’s research on links between the nology company could allow them to acquire PLA and researchers in Five Eyes states, a local identity, which they could then use to found that between 1998-2020 New Zealand operate internationally. scientists published 70 research papers with research partners at PLA-affiliated universi- New Zealand has a high-tech industrial sector ties. Sixteen papers were published in 2018, and a small, but world-class scientific commu- nine in 2019, and so far, seven were published nity. New Zealand government contributed in 2020.74 This number of papers published 1.6 percent of its GDP to universities in 2018, pales in comparison to Alex Joske’s finding a total of NZD4.56 billion dollars.77 This is that 1779 joint papers were published by significantly higher than the 1.16 percent of U.S. scientists with PLA counterparts from GDP spent on the New Zealand Defense 1995 to 2020, or the numbers published by Force.78 Government investment into New scientists of other Five Eyes partners, but Zealand universities accounts for 33 percent it is still of concern. New Zealand has eight of their funding.79 universities. 70 joint papers published with New Zealand is a Five Eyes member and a PLA-affiliated authors is a ratio of around NATO partner state. New Zealand companies eight PLA-connected papers per New make products with military applications, and Zealand university. Meanwhile, the United some of New Zealand’s academic research States has 1200 accredited universities is military-oriented. Some New Zealand offering at least a four-year undergraduate academics are funded via military cooper- program. 1779 papers published by U.S. ation projects, and some of it is contracted scholars with PLA-affiliated scholars equals a to U.S. government agencies such as NSF, ratio of about one PLA-connected paper per DARPA and the U.S. Navy.80 One New U.S. university.75 Zealand company supplies components for 8 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other U.S. missiles. New Zealand is useful for near- up over several years.81 Rakon also sells to space research; which is an important new ZTE.82 Huawei has close links to the PLA area of research for the PLA as it expands and the Chinese Ministry of State Security. its long range precision missiles, as well as Its ownership structure links it in to the CCP having civilian applications. New Zealand United Front Work Department.83 Intelligence- is close to Antarctica and has an advanced gathering and running assets is one of the Antarctic science program, which partners core activities of the CCP United Front Work closely with the U.S. Antarctic Program. Department.84 ZTE also has very close PLA China, and Russia, are developing global links.85 Rakon is an Auckland-based maker of navigation systems Beidou, and Glonass, crystal oscillators used in GPS, telecommuni- in rivalry with the United States’ GPS, and cations gear, missiles, and satellites.86 Rakon these require polar ground stations. China have developed crystal oscillators specifically already has three Beidou ground stations in for military use, including the navigation Antarctica and has recently set up a fourth systems of smart bombs and a radiation-hard- one in the Ross Sea area, where New Zealand ened product which is used in the United claims territory. Global navigation systems States nuclear weapons industry.87 Rakon are crucial for C4ISR (Command, Control, crystals are used in the U.S. JDAM smart Communications, Computers Intelligence bomb guidance system as well as civilian and Surveillance and Reconnaissance), as well military-use DAGR [Defence Advanced GPS as being useful in the civilian world. New Receivers].88 Zealand’s clear skies are also excellent for Rakon’s core markets are space, defense, as astronomical research and spotting missile well as civil and military-related global posi- launches. tioning, which puts them right in the sights of the PLA’s priorities. 5G networks could New Zealand’s Private Sector Links to be used as a weapon, or a point of attack, the PLA’s Military Modernization Agenda in a time of military conflict. China has a dominant position in network infrastructure New Zealand has a small, but advanced and is now expanding this via the Digital export-focused industrial sector. China is Silk Road; part of the globe-spanning Belt an important market for these companies, and Road Initiative. The Digital Silk Road will China is also a source of investment, and provide enhanced missile positioning, timing Chinese companies provide cheap products and enhanced C4ISR capabilities for the and services that bring prices down for Chinese military. New Zealand consumers. The New Zealand government has to manage the security risk In 2006, questions were raised as to whether of some of these links, against the economic Rakon’s products breached New Zealand’s advantages. Yet there are deep vested inter- military export control commitments. A New ests in getting the New Zealand government Zealand Ministry of Foreign Affairs and Trade to turn a blind eye to these links. official stated that, although Rakon’s crys- tals and oscillators could be used in military In 2012, Huawei Technologies NZ signed items, “export controls did not apply to goods a deal with Auckland-based technology assembled overseas.”89 In 2011, Rakon set company Rakon to use their frequency up a manufacturing factory in China, a joint control products in its handsets, smart venture between Rakon Chengdu Crystal and devices, and infrastructure programs. The Timemaker, in which Rakon had a 40 per cent deal formalized a relationship that had built stake. They also set up a factory in India.90 9 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other In 2013, Rakon sold 80 percent shares in and 5G and that decisions are being made their China factory to ZheJiang East Crystal on a case-by-case basis.93 Huawei, and the Electronic.91 Rakon now also have design CCP government, have pushed back hard workshops and manufacturing factories in against the New Zealand government’s the UK and France. Rakon have developed “case-by-case” restrictions on Huawei in 5G, 5G network technology that offers very it is interesting to note they did not complain high internet speeds and systems for near publicly about having been restricted as to space/low earth satellites, useful for C4ISR. how much they were allowed to contribute to The New Zealand government has not yet New Zealand’s 3G and 4G networks. Several taken a position on whether Rakon’s sales to Chinese media reports have claimed that Huawei and ZTE break export controls under the ruling has been reversed, but this is not the Wassenaar Arrangement. correct. The New Zealand government has not budged. Prime Minister Ardern and her Huawei Technologies NZ holds 40 percent ministers insist that the decision is GCSB’s market share of New Zealand’s mobile to make. GCSB pass the buck by putting network equipment. Huawei entered the the onus on network operators, who have New Zealand telecoms market in 2005, as to “assess…options to mitigate the risks”.94 the main financial backer of start-up mobile Spark and Vodaphone New Zealand are now network 2degrees, who are majority owned working with Nokia for their 5G roll out. by a Maori consortium.92 In 2018, acting on the Telecommunications (Interception Capability Huawei also has close links with New Zealand and Security) Act 2013, New Zealand’s universities. Victoria University of Wellington, Government Communications Security Massey University, and Lincoln University are Bureau (GCSB) rejected New Zealand tele- all “Huawei partners,” Huawei provides the coms company Spark’s proposal to involve wireless internet infrastructure across their Huawei in their roll out of 5G. 5G poses new multiple campuses and also provides research technological challenges that, unlike 3G and funding. Massey University told TVNZ they 4G, cannot be mitigated against. There has had informed GCSB about Huawei involve- been marked continuity between how the ment in their IT structure, and that GCSB did National-led government (2008-2017) and not try to block it.95,96 Huawei have a research the current Labour-NZ First-Greens Coalition lab at Victoria University of Wellington, where government have handled the involvement researchers investigate technologies such as of Huawei in NZ’s cellular mobile tech- 5G cellphone networks, “big data” and the nology. Under National Party governments potential of internet-connected devices.97 (2008-2017), Huawei was only allowed to Huawei built data capacity well in excess be involved in the edge networks of various of their needs for the VUW, Lincoln, and 3G and 4G projects (though they are in the Massey projects. According to a 2017 report, core of 2degrees networks). GCSB’s 2018 “Huawei sees New Zealand as a potential recommendation to block Huawei from safe haven for data storage. Political stability Spark’s 5G (and the Coalition government’s is part of the attraction for overseas compa- support of this decision) is crucially related nies wanting to keep data safe. So is distance to the technological shift that 5G presents in from the rest of the world.”98 In April 2020, the high level of integration of edge and core Huawei Technologies NZ CEO Yanek Fan, 范 networks. 岩, said Huawei had made preparations to deal with COVID-19, “two to three months The New Zealand government is very careful earlier”—before the pandemic exploded. to say they do not have a ban on Huawei 10 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other Among Huawei’s preparations for COVID-19 has been a lead sponsor of New Zealand’s was a massive network expansion. One Voyager Media Awards. Since 2018, they of their projects was a New Zealand-China have had naming rights on New Zealand’s intranet between VUW, Massey, Lincoln, television awards, now known as the and Huawei.99 This should surely raise alarm Huawei Mate30 Pro Television Awards.103 In bells about the intellectual property of 2017, Huawei sponsored the New Zealand researchers at these universities. China Mayoral Forum, which meets annually to discuss New Zealand’s involvement in the Huawei Technologies NZ have put consider- Belt and Road Initiative.104 able resources into marketing their company in New Zealand. In 2017, Huawei made a big New Zealand has also attracted the atten- media splash when they promised to spend tion of another controversial PRC company, NZ$400 million to build a cloud data center KuangChi Science. KuangChi Science and innovation labs in Christchurch and is infamous as the company which was Wellington. In an interview with NZ Herald, allegedly founded on technology stolen from Huawei director of public affairs, Andrew Duke University by KuangChi’s founder, Liu Bowater said “We’ve asked NZTE (New Ruopeng, when he studied for his PhD.105 Zealand Trade and Enterprise) to help us find Liu persuaded his supervisor, Professor suitable potential partners. We’re looking for David Smith, to allow him to bring his former everything from phone apps to chip sets.”100 Chinese colleagues into the lab as visiting However, in an interview in New Zealand’s fellows. Smith was working on a prototype Stuff website, Bowater admitted Huawei’s for a metamaterial that makes objects invis- New Zealand spending plans were in part ible to microwave signals. His research had “aspirational”. He acknowledged $250 million been funded by the U.S. military. When of the proposed increase in spending would Smith was away from the lab, Liu’s Chinese be accounted for by Huawei’s intention to colleagues took photos of the lab and its source more products and services locally. contents, and measured Smith’s equipment. Bowater said plans to build a cloud-com- KuangChi’s focus started out in metamate- puting data center–possibly in connection rials that can be used to improve aviation and with a local partner–would happen in New wireless technology.106 Liu benefited from Zealand “in about two years.”101 Three years funding from the Shenzhen government’s on, the plans have not eventuated. Peacock Plan, to set up his company.107 KuangChi Science website claims that it Huawei Technologies NZ sponsor the Seeds has 13 research and distribution centers all of the Future Scholarships, which offer 20 over the world, including the United States, all-expenses-paid scholarships per annum to Africa, Europe, as well as two centers in New Zealand ICT students to travel to China. New Zealand.108 Students spend one week in Beijing then a second week at the Huawei Shenzhen In 2014, Christchurch-based firm Martin campus learning about Huawei products.102 Aircraft signed an investment deal with Huawei are big sponsors of New Zealand KuangChi Science. Martin Aircraft was set media companies Stuff and NZME (owner up in 1981, when founder Glenn Martin of the NZ Herald), amounting to significant conceived the idea of a personal jetpack. subsidies in an economically-straightened With help from private investors, New market. Huawei have also sponsored Zealand’s Ministry of Business, Innovation New Zealand journalists to visit Huawei’s and Employment, and the Callaghan Shenzhen campus. Since 2017, Huawei Institute, prototype 12 of the Martin Jetpack 11 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other finally received authorization from the New Pacific Aerospace is a New Zealand-based Zealand Civil Aviation Authority for a test company which famously, illegally exported flight in 2013.109 The first manned test flight a plane to North Korea in 2015, breaking UN of a Martin Jetpack took place in Shenzhen, sanctions and New Zealand’s Wassenaar China in 2015.110 In 2016, KuangChi Science Arrangement commitments.120 Pacific became the main shareholder of Martin Aerospace was once 50 percent owned by Aircraft NZ. The KuangChi website states the New Zealand government and made that the Martin Jetpack has potential military training planes for the Royal Australian applications as well as search and rescue Airforce.121 The company is now 50 percent and recreational uses.111 A 2016 article in owned by a subsidiary of BAIC (北京汽 China Daily stated that KuangChi planned 车),122 a Chinese State-owned enterprise that to move all production of Martin Jetpacks to specializes in making military vehicles123 and China. Their Shenzhen factory had already exports military vehicles to Iran and North begun production and had orders for 200.112 Korea. In 2011, BAIC partnered with Beihang In 2017, Martin Aircraft NZ Limited posted University in a joint venture company Beijing a NZD 24-million-dollar loss and operations General Aviation, aimed at launching an had to be subsidized by KuangChi Science.113 aviation industry in the Beijing-Tianjin area. In 2018, company staff were reduced to Beihang University (Beijing University of ten, down from 100 employees,114 raising Aeronautics and Astronautics, 北京航空航天 concerns about the future of the intellectual 大学) specializes in military research, notably property of the company.115 Martin Aircraft’s on UAV technology and missiles. In 2014, New Zealand factory was finally closed BAIC bought 50 percent of Pacific Aerospace down in 2019. The Hong Kong branch of the through their subsidiary BAIC International company KuangChi Martin Jetpack, estab- (Hong Kong) to bring their airplane tech- lished in 2015, lives on as a limited liability nology back to China, as developing a plane company, as does Martin Jetpack USA, from scratch would take too long.124 Two of based in Delaware.116 the directors of BAIC (Hong Kong) are affili- ated with Beijing General Aviation Company In 2014, KuangChi Science, Pengxin (北京通航 BGAC), BAIC’s subsidiary which is International Mining Company Limited part of the CCP government’s China National (known in New Zealand as Shanghai Defense Industry Association Unmanned Pengxin), and Airways New Zealand signed Systems Branch, a military-civil integration an MoU to develop near-space launches project to build UAVs.125 in New Zealand.117 Airways New Zealand manages all military and civil air traffic BAIC have now adopted Pacific Aerospace’s operating within New Zealand airspace. P-750-XSTOL as the model for China’s first KuangChi agreed to use its near-space tech- ever drone cargo plane. Pacific Aerospace nology to assist Pengxin with broadcasting market the P-750-XSTOL as excelling on of telecommunications, mineral exploration, rough, unpaved airstrips. One version of the satellite television, meteorological surveil- P-750-XSTOL is for military use, specifically, lance, space tourism, disaster detection, and counter-insurgency (COIN) and light attack.126 forest protection. In 2016, KuangChi Science The original plane design was a light attack launched a near space balloon named aircraft for military purposes. P-750-XSTOL is Traveler from a farm in Ashburton owned by unique in being able to carry more than its Shanghai Pengxin.118 The KuangChi website actual weight in goods. claimed that the Traveler is capable of high The arrangement to make these planes in precision monitoring off the ground,119 with China gets around New Zealand’s obliga- potential use as a sub-orbital spy satellite. 12 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other tions under the Wassenaar Arrangement China after Xi Jinping’s visit to New Zealand of not exporting military technology to in 2014.133 Taylor read the citation when Xi China, North Korea, and other non-signa- Jinping’s wife, Peng Liyuan, received an tories of Wassenaar. In 2017, the Chinese honorary doctorate from his alma mater media reported that BGAC’s P-720 modified Massey University. After the award Taylor UAV was being pitched for military use as gave her “a gift of works and souvenirs” an armed military cargo plane to drop off from Weta.134 Taylor visited China’s National supplies in difficult mountainous terrain.127 Defence University in 2016 and according China’s contested mountainous border with to a PRC embassy account, his “demon- India would be one such location. Praising stration” there “broadened the views” of the BAIC-Pacific Aerospace technology the military academy’s students.135,136 In transfer in 2014, then Minister of Trade 2016, Taylor praised Peng, whose husband Tim Groser crowed, “Relationships like Xi Jinping is overseeing the strictest control this demonstrate that we don’t just export of the Chinese public sphere seen since the dairy and lamb to China, but also our tech- Mao era, as a “wonderful champion for the nology.”128 The Coalition government (2017- creative future of China’s youth.”137 2020) recognized the folly of this policy, but Weta Workshop does some of its manufac- the damaged caused is proving hard to undo. turing in China.138 Weta Workshop has worked Chinese company Iflytek is an artificial intel- on Chinese films and a U.S.-China co-produc- ligence start-up famous for voice recognition tion The Great Wall,139 starring Matt Damon technology. They are partnered with the and directed by director Zhang Yimou 张艺 Harbin Institute of Technology, which is active 谋.140 Weta Workshop have forged a close in military research. Iflytek have a weapons relationship with Culture Wuzhen Co., Ltd ( and military equipment license, and are 文化乌镇股份有限公司).141 In 2017 the two understood to be cooperating on speech companies held a joint exhibition.142 Wuzhen recognition technology with the PLA.129 is best known for hosting the World Internet Iflytek have an MOU with New Zealand Conference (世界互联网大会), a yearly event business incubator The Icehouse and they that showcases the Chinese government’s sponsor some of their events.130 In 2019, advances in surveillance technology and Iflytek signed a strategic cooperation agree- advocates the concept of “Internet sover- ment with New Zealand company Rocos eignty.”143 Global, a robot cloud platform enterprise that In 2017, Park Road Productions, a company is 54 percent owned by The Icehouse, which owned by Weta Group co-founder, largest is in turn funded by the New Zealand govern- shareholder, and former director Peter ment. Iflytek and Rocos plan to partner on Jackson was involved,144 with the help of creating an intelligent speech interaction substantial New Zealand taxpayer subsidies, platform for robots, featured content and in the production of China’s highest grossing applications, and intelligent hardware,131 all film Wolf Warrior 2.145 Wolf Warrior 2 (战狼II) of which have military-use applications. is a patriotic action film promoted with the Weta Workshop’s Sir Richard Taylor has slogan “Whoever assails our China, even quite a few links with PLA entities and though they be far away, will certainly be affiliates. According to Taylor, Weta has had executed” (犯我中华者,虽远必诛), a phrase a “special partnership with China” since which alludes to a passage in the Book of 1998.132 “National-level support” reportedly Han on the destruction of the Xiongnu.146 aided the introduction of Weta products into In the last ten years, the PLA has made a 13 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other major investment in military propaganda (军 it to be featured in a theme park in Beijing.158 事宣传), studying the experience of the U.S. A Hengxin Shambala subsidiary leads the military’s relationship with Hollywood,147 joint project with Pukeko Pictures “under among other influences. China’s military the guiding thought and basic principles of propaganda is targeted at both domestic Beijing Municipality’s Cultural and Creative and foreign audiences. Chinese language Industry Development Programme for the products focus on preparedness to fight. For Period of the 13th Five-Year Plan”, in order foreigners, PLA military propaganda empha- to “respond to the central Belt and Road sizes China’s “peaceful rise” [和平崛起] to strategy.”159 international power. The CCP government Wellywood’s partnership with Chinese film has instructed Chinese media companies to and television will require strict observance engage in strategic mergers and acquisitions of CCP censorship guidelines, which means of foreign media and cultural enterprises in no China-critical plots and exclusion of actors order to control the global China narrative. and crew who espouse critical views on This policy is known as “buying a boat to go Hong Kong, the CCP government, the situa- out on the ocean” (买船出海).148 tion in Xinjiang or other sensitive topics. Weta Workshop subsidiary Pukeko has worked on one of three co-production films New Zealand’s University Links to the between China and New Zealand.149 New PLA’s Military Modernization Agenda Zealand and the PRC signed a film co-pro- duction agreement in 2010 and a television New Zealand’s earliest scientific links with co-production agreement in 2014,150 China’s the PRC date to the 1970s, soon after New first with any country.151 In 2017, New Zealand Zealand established diplomatic relations in and China signed a joint film production 1972. Soon after New Zealand switched rela- agreement, which states that joint films will tions from the Republic of China (ROC) to the be eligible for any government subsidy avail- PRC, New Zealand officials acknowledged able in each country.152 The agreements were that the reasons for doing so were primarily signed by the CCP government’s agency “political”. The majority of New Zealand’s in charge of censoring the Chinese media. trade was with the ROC and New Zealand Also in 2017, Hengxin Shambala 恒信东方文 had a strong political relationship with Taipei. 化股份有限公司bought a 25 percent stake In order to broaden NZ-PRC relations, New in Pukeko, citing the advantages of the 40 Zealand diplomats recommended the expan- percent subsidies provided to film-makers sion of scientific, cultural, and sporting links by the New Zealand government.153 Hengxin with the PRC.160 In 1975, China sent an Shambala is led by its co-founder and biggest exploratory scientific team to New Zealand shareholder Meng Xianmin 孟宪民.154 Meng and New Zealand was quick to reciprocate.161 Xianmin worked at the 54th Institute, now In 1984, New Zealand and China signed part of China Electronics Technology Group a joint technology agreement to facilitate Corporation (CETC, 中国电子科技集团), in the the exchange of information and experts early 1990s.155 CETC is one of the PRC’s main between the two countries.162 In 1987, New defense conglomerates. The 54th Institute Zealand and China signed a Science and is focused on military communications.156 A Technology Cooperation Agreement, then former director of Hengxin Shambala has a updated it in 2003. In 2009, New Zealand and military background.157 Taylor’s “relationships China set up a scientist exchange program, in China” helped Pukeko get a deal allowing to support short-term research visits for up to 14 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other five researchers a year from China to institu- system for Han settlers within the Xinjiang tions in New Zealand and vice versa.163 Then Autonomous Region.167 Shihezi is the capital in 2010, the New Zealand-China Strategic city of the Bingtuan, and Shihezi University is Research Alliance (SRA) was launched. The the Bingtuan university. SRA aimed to increase scientific research The core aspect of the Bingtuan’s coop- partnerships and greater commercialization eration with Massey University, is intrin- of science between China and New Zealand, sically linked to the Bingtuan’s military and set out a five year plan to achieve this.164 function. The 2014 Bingtuan White Paper In 2018, New Zealand and China signed a highlights the Bingtuan role in using the 屯 further five-year arrangement for science and 垦 ‘station [troops] to reclaim [wasteland]’ technological cooperation. High technology so as to promote Xinjiang’s “ethnic unity” platforms, including nanotechnology and (民族团结).168 The White Paper stresses superconductivity were one of four priority the Bingtuan’s role in preserving Xinjiang’s areas of the 2018 agreement,165 all of these “social stability” and fighting the “three have military-civil use. However, in the 2020 evils” (三股势力: terrorism, “splittism,” and call for visiting scholars, these topics had “religious extremism,” the latter is defined been dropped. Instead, food science, health to include most open and private manifesta- and biomedicine, and environmental science tions of Muslim faith). In its militia function, were prioritized.166 Below I will outline some the Bingtuan works with the PLA and the examples of links between PLA-affiliated People’s Armed Police (武警). universities and New Zealand universities and academics. Massey University, Beijing University, and Shihezi University are partnered via the Three Massey University Brothers Cooperation Project (三兄弟合作计 划) to develop sheep genetics.169 Massey Massey University has extensive connec- scientists also cooperate with Xinbao tions with PLA-affiliated organizations and Farming Group (鑫宝牧业集团), a Bingtuan- universities. These links have developed over owned sheep-farming company.170 In 2015, many years. In 2005, Massey established the pioneering partnership between Massey, a partnership with Shihezi University, a Beijing, and Shihezi universities was praised university within the Xinjiang Production and by then-ambassador Wang Lutong as one of Construction Corps (新疆生产建设兵团, or the many “firsts” that characterize China’s Bingtuan 兵团). The Bingtuan is a paramilitary relationship with New Zealand.171 body with a special administrative system that merges Party, government, military, The Bingtuan has a crucial role in the CCP and business functions. It has settlements government’s mass detention of the Uighur throughout Xinjiang Autonomous Region. people, building and administering detention The Bingtuan was set up in 1954 to assist camps in areas under their jurisdiction.172 At with the CCP government’s pacification of a time when an estimated 1.5 million Xinjiang Xinjiang after the end of the Chinese civil Uighurs are held in detention centers and war. In the 1950s and 1960s, thousands of their children housed in orphanages,173 it is demobilized PLA soldiers and young people questionable that New Zealand-taxpayer were sent to the Bingtuan areas to colonize funded bodies should be involved in part- Xinjiang. Twelve percent of the Xinjiang nering with organizations engaged in mass workforce now work for the Bingtuan, repression and human rights abuses. The which is effectively a separate government origin and paramilitary nature of their partner 15 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
Holding a Pen in One Hand, Gripping a Gun in the Other institution is understood by the Massey jewel in the crown” of Massey’s China scientists involved. Massey Professor Hugh partnerships.181 During Massey staff’s third Blair says the Bingtuan, “has similarities to visit to National Defence University in 2017, the New Zealand Army Reserve” and writes VC Thomas, was described as “revelling” that Shihezi University is “military-related.”174 (陶醉) in the Academy’s “military culture of unique characteristics.”182 In 2014, during CCP General Secretary Xi Jinping’s visit to New Zealand, Massey The main goal for the university of these University awarded Xi’s wife, Peng Liyuan exchanges appears to have been to increase 彭丽媛 an honorary doctorate for her “inter- Chinese postgraduate student numbers, national contributions to the performing obtain greater access to research funds arts and health and education programs.”175 from the Chinese state, and to garner busi- Many of the subsequent intensive contacts ness opportunities for Massey partners like between Massey and Chinese institutions, Weta,183 facilitated by Peng’s patronage including the PLA, appear to have been facil- and the link to PLA organizations. The PLA itated by the bestowal of that honor. has a central role in the relationship, and further contacts soon developed with other Peng is the head of the PLA Academy of PLA-linked universities. Weta Workshop Art (解放军艺术学院, in 2017 renamed the sponsors a Masters in Design at Massey Institute of Military Culture (军事文化学院), University, focused on entertainment design at the National Defence University of the for film, television and gaming—the kind of PLA (NDU, 国防大学).176 Peng Liyuan has business activities that Weta and its affiliate worked in the PLA since she was 18. Peng’s Pukeko are pitching in China. Unusually, the “performing contributions to the performing degree follows the northern hemisphere arts” that were recognized by Massey with timetable, starting in September each year.184 an honorary doctorate consist of her career The degree is targeted at PRC students.185 as a PLA singer, which include singing, in full uniform, for the troops in Tian’anmen Square In October 2017, Massey University scientists in 1989, days after the June 4 massacre.177 visited Iflytek in Hefei to sign an agreement The Chinese media describe Peng as “a providing funding for a professor position military singer who has received the deep at Massey.186 As noted, Iflytek, an artificial appreciation of the public within and outside intelligence start-up famous for voice recog- the Army.” She is the youngest PLA civilian nition technology, is partnered with the officer with the rank of major general.178 Harbin Institute of Technology, which is active in military research.187 Iflytek’s speech Since the bestowal of Peng’s doctorate, repre- recognition technology is being used for sentatives from Massey, including vice-chan- a domestic surveillance project led by the cellor Steve Maharey and his successor Jan Ministry of Public Security. In November Thomas, as well as Weta Workshop, led by 2017, Iflytek sent senior Vice President Sir Richard Taylor, have frequently visited Du Lan 杜兰 to give a talk at the 3rd New National Defence University, at Peng’s invi- Zealand-China Youth Leaders Forum, hosted tation.179 On a 2017 visit, Massey academics, by the University of Auckland. Hu Guoping accompanied by Weta Workshop staff were 胡国平, head of AI research at Iflytek, has hosted by Peng at the Great Hall of the co-authored papers with Ministry of Public People.180 Maharey has described Massey’s Security affiliated scientists.188 In 2017, Hu relationship with the PLA Academy of Art Guoping was present at a meeting orga- at National Defence University as “the nized at the residence of then New Zealand 16 Anne-Marie Brady, with Jichang Lulu and Sam Pheloung
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