QUAD aka Asian NATO Revived as Hybrid War Intensifies


    Chinese intelligence operations in Australia

    Even if the trade war de-escalates, it is unlikely that Chinese vs Australian bilateral relations will improve significantly. This article explores the breakdown of relations, revelations of Chinese intelligence operations in Australia, and the Quad. The outlook will be assessed, with a potential clandestine military outpost being built 200km away in Papua New Guinea.

     Key Judgements

    • Australia’s geopolitical stance and role in the Five Eyes (FVEY) intelligence alliance, comprising the US, UK, Canada, and New Zealand, places the nation at odds with Beijing.
    • China’s intensified military modernisation and aggressive bid for hegemony via hybrid warfare in the region alarms Australian officials and key allies. This is supported by the revival of the Quadrilateral Security Dialogue (Quad/Asian NATO) in 2017. The US, Japanese, Australian, and Indian security framework is seen as a direct threat to Chinese interests.
    • China and Australia’s ongoing hybrid warfare has led to a trade war that has resulted in blackouts in China, while 6% of Australia’s GDP is at risk.


    Bilateral relations unravelled leading up to 2020 reaching a concerning status quo. Following reports of Chinese election interference in Australia’s capital Canberra, 2017, Australia bans foreign political donations. In 2018, Australia bans covert foreign interference in the political process and outlaws foreign industrial espionage. Di Sanh Duong, president of the Oceania Federation of Chinese Organisations, is linked to Chinese intelligence. November 2020, Duong becomes the first person charged under the 2018 laws following a Counter Foreign Interference Task Force investigation.

    Citing national security concerns, Australia was the first FVEY member to ban Huawei 5G infrastructure in 2019. A further 10 Chinese investment projects were also blocked. Members of the alliance have also followed suit, a move met with severe criticism from China. The 5G infrastructure posed a foreign intelligence gathering threat and risked potential access to the national grid and critical infrastructure. Huawei lobbied relentlessly to avoid denial from Western markets, calling the claims baseless.

    Between 2019-2020, Australia ramped up political pressure on China, publicly criticising aggressive foreign policy in the South China Sea and Taiwan. Australia also criticised aggressive power consolidation in Hong Kong and human rights concerns over Uyghur Muslims in Xinjiang. Australia called for an inquiry into the origins of COVID-19, which beyond a reasonable doubt, increased existing tensions. The hybrid warfare in the information space is evident. In November, a Chinese Foreign Ministry official tweeted a doctored image of an Australian soldier holding a knife to an Afghan child. This was in response to an investigation revealing Australian special forces unlawfully killed at least 39 civilians in Afghanistan. Australian calls for an apology are rejected.

    China’s foreign policy focuses on aggressively promoting Chinese interests internationally. Criticism that this is against the international order is met with the argument that this order was tailored to benefit the West, not China. Australian tensions are perceived as an extension of US influence in the region and Xenophobia. China being Australia’s largest trading partner, at face value Australia almost certainly has more to lose, economically. The information warfare in Sino-Australian relations is unlikely to de-escalate in the short-term.

    Trade War

    China totals 35% of Australia’s trade, in contrast, Australia totals 6% for China. In the economic soft power frontier, China orchestrated its strategy from a position of power. In May, an 80% tariff on Australian barley imports were imposed, threatening the $1.5 billion trade between the nations. Next in line was Australian beef imports, citing ‘technical issues’ rather than a response to the COVID-19 inquiry calls. Coal became the next target, placing informal quotas that led to $700 million worth of Australian coal delayed at ports. Lobster, cotton, and wine faced dubious screening practices, stranding imports. A 200% tariff on wine imports followed, diminishing a $6 billion industry. Timber is now the latest target on grounds of contamination issues.

    Chinese intelligence operations in Australia

    Timing of these measures, with a deterioration of relations, make the assessment that China is attempting to ‘punish’ Australia accurate. Iron ore imports, a $41 billion trade industry, leaves China dependent on Australian imports (supplying 60%). Measures on iron ore have seen a sharp rise in the price, to the dismay of Chinese steel mills. A similar response from Australia would highly likely leave significant portions of Chinese steel mills closed. The coal sanctions may likely have backfired. In 2019, 57% of thermal coal imports were from Australia. Several provinces in China have faced partial power blackouts from the lack of energy. By ‘punishing’ Australia, China sends an unintentional international message that economic dependence comes with strings attached. There are no winners in this dispute.

    Intel Ops

    Chinese intelligence operations in Australia are enormous in scale. Zhenhua Data, a Shenzhen company openly linked to Chinese military intelligence, is relevant evidence. A leak revealed a global database of 2.4 million people of interest to the Chinese Communist Party (CCP). 35,558 Australians were on the database, including politicians, lawyers, executives, and military officials. The database utilises open-source and dark web intelligence collection on individuals. Chief executive Wang Xuefeng endorses hybrid and psychological warfare. The company claims it has 20 ‘collection nodes’ globally. Two nodes were discovered in the US and South Korea. Australia’s node remains hidden. This revelation and a suspected June Chinese cyber-attack on Australian infrastructure decrease the likelihood of positive relations between the nations.

    Asian NATO and Chinese ‘Exploration’

    In November, the Quad alliance held its largest naval military drills in the Indian Ocean. This move is a direct message to Chinese ambitions in the Indo-Pacific. The Quad, founded in 2007, disbanded following Chinese and Australian criticism. The geopolitical landscape is now different. Quad alliance members are at odds with CCP policies in the region. China claims the energy-rich Paracel Islands, ignoring the Philippines, Malaysia, Vietnam, and Taiwan claims. A 2016 UN tribunal labelled Chinese claims unlawful. The Quad itself has no coherent strategy to address their Chinese competition.

    Quad discussions to create a belt and road initiative alternative failed. It is unlikely the Quad at present will sway Chinese ambitions significantly. A $200 million fishery complex to be built 200km at Daru Island supports this. The area has no commercial fishing activities. CCP controlled fisheries are trained to support the military. Armed fishing militias play a major role in CCP strategy. These militias have engaged in hybrid warfare with US naval vessels. The new base not only provides China with a new intelligence base but a potential military launchpad in the grey zone and further Chinese intelligence operations in Australia.


    Image: NHK World (link)

    Image2: Lijian Zhao / Twitter (link)

    Image3: Vietnam Times (link)

    Eren Ersozoglu
    Eren Ersozoglu
    Eren Ersozoglu is an analyst at Grey Dynamics. A former history graduate from Coventry University with a focus on links between terrorism and organised crime and intelligence and security studies graduate at Brunel University.

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