Commentary | 19 September 2016

China's rising soft power

Originally published in The Australian.

  • Peter Cai

Originally published in The Australian.

  • Peter Cai

Executive Summary

China and the Chinese Australian community have been put under intense spotlight lately for a range of controversial issues, from political donation, organising Mao concert to exerting political influence over Australian politicians. This has sparked an important debate about China’s soft power influence in Australia.

Over the course of the last few weeks, many Chinese government-linked organisations and their connections with Australian political leaders, from the Labor power­broker Sam Dastyari to Foreign Minister Julie Bishop, have been exposed.

Once obscure organisations, such as the Australian Council for the Promotion of Peaceful Unification, have been identified as a “peddler” of Beijing’s influence in Australia. Should we be surprised that so many seemingly innocuous civil and business organisations have connections with the Chinese government?

The answer is we should not.

The Chinese Communist Party has more than 80 million members, more than three times the Australian population. If you take an uncharitable view, the law of two degrees of social separation means everyone in China has a Communist Party connection. The party is, for want of a better term, a broad church, which include diehard Maoists to the country’s richest real estate and tech tycoons.

China is the only place in the world where you can find billionaire communists thanks to doctrinal innovation by former president Jiang Zeming. Nearly 1.63 million private companies in China have Communist Party committees, which represents more than half of the country’s private businesses. This is not CIA intel, but figures from China’s own state-owned media Xinhua.

Foreign multinationals in China have party cells too. For example, General Motors’ joint-venture company in Shanghai has a party committee. Yes, that is right, the most iconic all-American company has a party cell too. This probably means, all large Chinese companies operating in Australia have party connection one way or another.

A joint report produced by the Australian National University and China Centre for International Economic Exchange says this proliferation of party committee is simply a natural result of China’s political system. People in China become Communist Party members not because they believe in Karl Marx or Mao, but because it is important for their career. So don’t be surprised if you meet a Harvard-educated fund manager who is also a party member.

Recent reports have also pointed out Chinese Australian businessmen’s link with Beijing-controlled political bodies such as the People’s Political Consultative Conference. But it is largely a ceremonial body and seats have been handed out to successful business people, artists, movie stars and sportsmen as part of the party’s united front work of co-opting non-party elites. Nobel laureate Mo Yan, Jackie Chan and basketball star Yao Ming are all members of this body. Think of it as China’s House of Lords.

But there are also bodies with much more sinister connection with the party state. For example, the innocuous sounding China Association for International Friendly Contacts is in fact a ­platform for the Liaison Department of the General Political Department of the People’s Liberation Army, according to John Garnaut, one of Australia’s leading China experts.

So what does it mean for Australian politicians and business people who need to engage with China? It means they have to understand the party is the superstructure of the Chinese state and most organisations and businesses have formal and informal connection with the ruling party. Most of time it is not a problem and we have to accept it as the political reality of engaging with China.

However, other times it will raise issues. For example, Labor political heavyweights Chris Bowen and Sam Dastayari were listed as patrons of the Australian Council for the Promotion of Peaceful Unification, which supports Beijing’s official policy over Taiwan, Tibet and Xinjiang.

Is it wise for senior political figures to be associated with Beijing’s controversial policy? The answer seems to be quite clear. Their names have since been removed from the association website.

What about dealing with a government-linked business body? Most of China’s business associations are government sponsored. The country’s peak business lobby group is called All-China Federation of Industry and Commerce, Australia’s equivalent of BCA. Its chairman has a formal administrative rank equal to that of a minister. Given its strong government link, does it mean you don’t deal with these bodies.

Of course not, because these bodies represent the country’s influential business community.

Poly Group, a one-time arm of the People’s Liberation Army, is active in developing properties in Australia. Dealing with this company will pose dilemma for businesspeople if they know Poly is also a large exporter of weapons, according to the Stockholm International Peace Research Institute. So what do you do?

These examples illustrate the importance for Australian business, organisations and politicians to understand more about the political economy of China. They have to understand who they are dealing with and what potential risk it will bring. It is simplistic to suggest people with government links are agents of Beijing. Most of Chinese businesses have formal and informal connections with the state and the party; this is just the nature of China’s political system.

Politicians and business people should be alert but not alarmed.


Peter Cai is a research fellow at the Lowy Institute for International Policy.