WEBVTT - Are BYD cars Chinese spyware?

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<v Speaker 1>From Schwartz Media. I'm Daniel James. This is seven AM.

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<v Speaker 1>A sleek Chinese made ute is suddenly one of the

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<v Speaker 1>most popular vehicles on Australian roads. It's cheap, fast and

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<v Speaker 1>packed with tech. But behind its rise, our questioned security

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<v Speaker 1>agencies are struggling to grapple with because the cars we

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<v Speaker 1>drive today are no longer just cars. They are also

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<v Speaker 1>data collection tools, and in a tense geopolitical climate, the

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<v Speaker 1>lines between convenience and surveillance are blurring today. Senior follow

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<v Speaker 1>at the Lower Institute and contributed to Australian Foreign Affairs

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<v Speaker 1>Richard McGregor on the BYD Shark, China's quietly tightening technological

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<v Speaker 1>grip on Australian infrastructure and what it means for national security.

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<v Speaker 1>It's Monday, JUNEO, So, Richard, I wanted to start with BYD.

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<v Speaker 1>These cars are everywhere on Australian roads right now. What

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<v Speaker 1>can you tell me about them and how they became

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<v Speaker 1>so popular here?

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<v Speaker 2>Well? BYD is actually quite an old company by Chinese standards,

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<v Speaker 2>at least twenty years old. It was originally a battery company,

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<v Speaker 2>you know, a Chinese entrepreneur and Shenzen set it up

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<v Speaker 2>more than a decade ago, Warren Buffett invested in BYD,

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<v Speaker 2>but it really didn't, you know, start to develop rapidly

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<v Speaker 2>as a company and as a global company and as

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<v Speaker 2>a global car company until about three four years ago

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<v Speaker 2>when their models went well. I guess they started making

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<v Speaker 2>better cars. When Chinese EV manufacturing generally started to develop

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<v Speaker 2>rapidly and in fact become much better, much cheaper, even

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<v Speaker 2>in some respects more technologically advanced than Western models, and

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<v Speaker 2>it just became a BMH and Paul, we're sitting inside

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<v Speaker 2>the bod Shark today. We're going to redo some of

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<v Speaker 2>the tests and Bad's most popular car in Australia is

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<v Speaker 2>a Yuit called the Shark six. Is it faster, Yes

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<v Speaker 2>it is. Has it got more tech in it? Yes

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<v Speaker 2>it does. Is it cheaper also, yes?

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<v Speaker 1>So it's winning at the moment, isn't it.

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<v Speaker 2>It's a hybrid, not an EV, but it's past all

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<v Speaker 2>of the most stringent sort of off road tests that

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<v Speaker 2>Ossie's throw up for their utes, even more so than Toyota.

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<v Speaker 3>One of the things I wanted to do was really

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<v Speaker 3>push the limit of the Shark.

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<v Speaker 1>To do that, you've got to go and cross the

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<v Speaker 1>simps and desert. I reckon.

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<v Speaker 2>It became massively popular very quickly in Australia this year,

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<v Speaker 2>and I think became one of the largest selling cars

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<v Speaker 2>in the country in a matter of months.

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<v Speaker 1>So for a lot of people, these cars are appealing

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<v Speaker 1>because they're relatively affordable electrical hybrid vehicles. That's not necessarily

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<v Speaker 1>how Canberra season, how are they looking at this situation

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<v Speaker 1>as it's unfolding.

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<v Speaker 2>Yeah, I guess the first thing the slight qualification. They're

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<v Speaker 2>not just affordable, they're good. You know, Chinese tech used

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<v Speaker 2>to be cheap but not necessarily good. Now Chinese tech

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<v Speaker 2>is cheap or competitively priced, but also often the best.

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<v Speaker 2>So that's a totally new ballgame. I guess that's why

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<v Speaker 2>Canberra is looking at it with such anxiety. And I

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<v Speaker 2>guess the key issue here is that everything these days

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<v Speaker 2>is effectively bundles of software controlled by the host country

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<v Speaker 2>or companies in the host country and updated by them

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<v Speaker 2>and having access to them. Now, according to Chinese law,

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<v Speaker 2>any Chinese company, private, public, or otherwise must give complete

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<v Speaker 2>access to that country's security services if asked. You know,

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<v Speaker 2>there's no system of warrants or judicial view or you know,

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<v Speaker 2>judges looking at it or anything like that. It's just

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<v Speaker 2>one and part of the entire system. So countries like

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<v Speaker 2>Australia which don't have a trusted relationship with China, are

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<v Speaker 2>we happy with having large parts of the data generated

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<v Speaker 2>by our economy are potentially open to the Chinese government

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<v Speaker 2>and Chinese security services.

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<v Speaker 1>So what are the concerns that the national security agencies have?

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<v Speaker 1>I mean, what kind of scenarios are they imagining that

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<v Speaker 1>can happen with China having access to all of this data.

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<v Speaker 2>Yeah, it sounds kind of conspiratorial and crazy, but I

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<v Speaker 2>think it's pretty straightforward. Let's take the example of cars again,

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<v Speaker 2>you know cars, electric cars and the like, you know,

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<v Speaker 2>which in turn are going to become sort of driverless cars.

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<v Speaker 2>They're always training themselves on the surrounds. In other words,

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<v Speaker 2>they're little data collecting machines. So they're filming where they're going,

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<v Speaker 2>they're processing that data. Often they're filming where they're going

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<v Speaker 2>and filming faces on the street, for example, and you know,

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<v Speaker 2>collecting information about citizens. Now, in some respects that's quite normal.

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<v Speaker 2>You know, evs in America do that as well. That

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<v Speaker 2>they're all training themselves to be better cars, as it were.

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<v Speaker 2>But do we worry about an American car like we

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<v Speaker 2>would like a Chinese car. There are some people in

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<v Speaker 2>Australia who couldn't care less. There are others who would

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<v Speaker 2>be deeply concerned. I think today it's basically common sense

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<v Speaker 2>that China would be collecting data and using data, just

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<v Speaker 2>as by the way Facebook does, you know, Instagram does,

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<v Speaker 2>et cetera, et cetera. Everybody's collecting data, and we as

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<v Speaker 2>a country have to think about how that's collected, who's

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<v Speaker 2>collecting it, and how it's used. And at the moment

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<v Speaker 2>that's dominated by Chinese companies in Australia.

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<v Speaker 1>Is there any way that we can store the daily

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<v Speaker 1>that those cars collect on shore in Australia.

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<v Speaker 2>Well, that's one of the debates onshore storage. For example.

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<v Speaker 2>You know Donald Trump has tried to find ways for

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<v Speaker 2>TikTok to remain available in the US. Was actually banned

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<v Speaker 2>by a law passed by Congress. Trump he keeps putting

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<v Speaker 2>off that ban. And the particular proposal in the United

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<v Speaker 2>States was to get companies owned by Oracle, the software company,

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<v Speaker 2>to store TikTok data onshore in the US so it

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<v Speaker 2>couldn't potentially be accessed by the parent company in China

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<v Speaker 2>and by extension, the Chinese authorities. So yes, that is

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<v Speaker 2>one possible thing that we could do. There are others

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<v Speaker 2>who say that's not enough or it's not foolproof, because

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<v Speaker 2>there are other ways of accessing the data and we

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<v Speaker 2>might struggle to monitor that. But to give you another

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<v Speaker 2>example about the US, for example, the Biden administration brought

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<v Speaker 2>in new rules which banned connected cars in other words,

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<v Speaker 2>evs collecting data from untrusted entities. In other words, it's

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<v Speaker 2>China from the United States, a rule that comes into

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<v Speaker 2>force in twenty twenty seven. Would we do that? You know,

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<v Speaker 2>it would be very hard to do that in Australia.

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<v Speaker 2>In the US, there aren't many Chinese ebs in Australia.

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<v Speaker 2>We don't tariff cars anymore. We gave up our car

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<v Speaker 2>industry a bit over a decade ago. So you know,

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<v Speaker 2>the influx of Chinese cars has been great for Australian consumers.

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<v Speaker 2>And it's the government really going to force consumers to

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<v Speaker 2>pay more or force those cars out. That's very difficult

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<v Speaker 2>to see. It's a very costly decision, costly economically, of course,

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<v Speaker 2>but costly diplomatically as well.

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<v Speaker 1>With China and a great technical challenge too.

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<v Speaker 2>Would imagine it's a technical challenge particularly from middle sized

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<v Speaker 2>economy like Australia, which doesn't have the resources of China

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<v Speaker 2>or the United States.

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<v Speaker 1>After the break the diplomatic impact of banning Chinese technology, Richard,

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<v Speaker 1>we're talking about Canberra's security concerns around Chinese technology and

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<v Speaker 1>the Chinese government's access to our data. So has our

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<v Speaker 1>government ever acted on these concerns.

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<v Speaker 2>To give you a context here, let me take you

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<v Speaker 2>back to twenty eighteen when the then government of Prime

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<v Speaker 2>Minister Malcolm Turnbull effectively banned the Chinese Telecommunications Company by

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<v Speaker 2>Way from bidding to be the sort of chief contractor

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<v Speaker 2>for Australia's five G TELCA network.

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<v Speaker 3>The decision we took was really one based on hedging

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<v Speaker 3>against future risks. I mean, the reality is the nature

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<v Speaker 3>of the five G network is that you cannot any

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<v Speaker 3>longer reasonably distinguish between the core and the radio access network.

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<v Speaker 2>And this was basically because the government decided that they

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<v Speaker 2>couldn't be sure that effectively Australia would maintain control and

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<v Speaker 2>access to the network. You know, should there be a

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<v Speaker 2>conflict of any kind, should relations with China plummet dramatically.

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<v Speaker 3>Intent can change in a heartbeat, so you've got to

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<v Speaker 3>hedge and take into how the risk that intent can

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<v Speaker 3>change in the years ahead. Remember a threat as a

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<v Speaker 3>combination of capability and intent, So in areas of national

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<v Speaker 3>security where naturally cautious, prudent and hedging.

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<v Speaker 2>And that was a big decision at the time. It

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<v Speaker 2>was one of the tipping points in the change in

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<v Speaker 2>attitude of Beijing to Australia and which resulted in China

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<v Speaker 2>taking punitive trade measures against Australia in twenty twenty you know,

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<v Speaker 2>banning wine, bali, lobsters, coal, et cetera, et cetera.

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<v Speaker 4>And relations between China and Australia appear to be further

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<v Speaker 4>deteriorating China's.

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<v Speaker 2>China has banned bali imports from Australia's largest exporter CBH,

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<v Speaker 2>claiming the product had harmful weeds in its grain.

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<v Speaker 4>If this is confirmed by the government, the move would

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<v Speaker 4>further inflame tensions between the two countries, which appear to

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<v Speaker 4>be heading towards a trade hall.

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<v Speaker 2>But if you go fast forward now twenty twenty five,

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<v Speaker 2>in retrospect, the Highwai decision looks very easy because it

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<v Speaker 2>was cost free. Effectively cost free in this respect, we

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<v Speaker 2>didn't have to rip anything out of our telecommunications network.

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<v Speaker 2>We just bought a different system from Rickson. But now,

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<v Speaker 2>if you look at the Australian consumer and industrial economy

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<v Speaker 2>and the evs or hybrid vehicles are part of this,

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<v Speaker 2>it's dominated by China evs. Eighty percent or so of

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<v Speaker 2>evs and Australia are made in China, including Teslas, by

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<v Speaker 2>the way, which are made in the Tesla factory in Shanghai.

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<v Speaker 2>The same goes for solar panels, are same goes for

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<v Speaker 2>wind farms. So the five G decision was easy in retrospect.

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<v Speaker 2>But imagine the impact of a decision now of the

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<v Speaker 2>Australian government to somehow regulate Chinese electric vehicles and hybrid vehicles.

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<v Speaker 1>And as consumers, Richard, do you think people should be

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<v Speaker 1>worried about their data being gathered by byd and other

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<v Speaker 1>Chinese companies and given to the Chinese government.

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<v Speaker 2>Look, I don't think individual Australians necessarily have to worry.

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<v Speaker 2>You know, your data or my data is not particularly

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<v Speaker 2>meaningful to the Chinese. But we do have a duty

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<v Speaker 2>and obligation to protect parts of the Australian economy, individuals

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<v Speaker 2>in Australia who particularly play a role in the national

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<v Speaker 2>security establishment. It's basically about sovereignty one way or another.

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<v Speaker 2>You know, are we able as a sovereign nation to

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<v Speaker 2>manage our own data and stop it being accessed by

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<v Speaker 2>foreign entities that we don't trust and that we're in

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<v Speaker 2>conflict with on other issues. So you don't want to

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<v Speaker 2>induce sort of, you know, widespread paranoia about every bit

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<v Speaker 2>of Chinese technology. You've got to make judgments in particular cases,

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<v Speaker 2>and if there is a risk, you have to try

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<v Speaker 2>and mitigate that risk.

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<v Speaker 1>Have we ever faced a large skyle sober attack from

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<v Speaker 1>another country before?

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<v Speaker 2>We have not, as far as I know, we have

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<v Speaker 2>faced You know, a lot of entities in Australia have

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<v Speaker 2>suffered cyber intrusions or cyber attacks if you like, but

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<v Speaker 2>they're usually by private hackers, people we would call hackers

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<v Speaker 2>Russians in the like. It might be Chinese entities as well.

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<v Speaker 2>It could be all sorts of people, but not by

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<v Speaker 2>a nation state, and that's very different. You know, countries

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<v Speaker 2>like Taiwan, for example. I think Taiwan is the country

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<v Speaker 2>which suffers the most cyber attacks by a state entity,

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<v Speaker 2>obviously China in that case. You know, Taiwan is quite

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<v Speaker 2>an advanced technological economy, but it is pretty helpless in

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<v Speaker 2>the face of Chinese attacks and the like. So we're vulnerable.

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<v Speaker 2>Everybody is vulnerable. I guess the issue here is the

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<v Speaker 2>intent of a nation state in conducting a cyber attack

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<v Speaker 2>on Australia. Why would they be doing it? What would

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<v Speaker 2>they attack that The sorts of cyber attacks which have

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<v Speaker 2>been rehearsed against the United States by the Chinese is

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<v Speaker 2>turning off the water supply at different places for example.

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<v Speaker 2>You know, you want to stop troops moving in the country,

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<v Speaker 2>cut off the water near them, cut off the electricity

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<v Speaker 2>in the light. So it's that sort of thing. Now,

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<v Speaker 2>not making a moral point here, you know, I presume

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<v Speaker 2>that the Americans are rehearsing the same sort of cyber

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<v Speaker 2>intusions as the Chinese. It's a matter of you know,

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<v Speaker 2>how a country is smaller country like Australia protects itself

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<v Speaker 2>against that if it doesn't stop at how it identifies

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<v Speaker 2>that attack, and how it shuts it down and then

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<v Speaker 2>recovers from it.

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<v Speaker 1>Richard, thank you so much for your time.

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<v Speaker 2>Thank you very much.

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<v Speaker 1>You can read Richard McGregor's artical Trojan Horses How to

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<v Speaker 1>Defend against Chinese Technology in the new edition of Australian

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<v Speaker 1>Foreign Affairs. It's out today. Just before we go, I

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<v Speaker 1>want to let you know that today's episode is our

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<v Speaker 1>lastest part of Schwartz Media. Seven Am will continue in

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<v Speaker 1>the same format, with the same team and in the

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<v Speaker 1>same feed, but with new owners, an independent media company

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<v Speaker 1>called Solstice Media. We love making the show and our

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<v Speaker 1>commitment to independent journalism is stronger than ever. We have

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<v Speaker 1>some exciting episodes planned and we hope you continue to

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<v Speaker 1>follow and support our work. Also in the news tenure,

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<v Speaker 1>Plippersek has criticized objections within the Liberal Party to apply

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<v Speaker 1>quotas to address gender equity in the party. Pliposek told

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<v Speaker 1>ABC News the Coalition is happy to have quotas for

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<v Speaker 1>National Party and ps on the front bench, but rejects

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<v Speaker 1>quotas to a dressed their unequal balance between men and

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<v Speaker 1>women in Federal Parliament. Following Opposition leader Susan Lee's signaling

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<v Speaker 1>she's open to the idea of quotas, shadowed Defense Minister

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<v Speaker 1>and Lee's rival in the recent leadership stout, Shangus Taylor

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<v Speaker 1>said he opposes changes that would promote Liberal women into

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<v Speaker 1>winnable seats. Women make up less than a third of

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<v Speaker 1>the Liberal Party's parliamentary team and a band LGBTQIA plus

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<v Speaker 1>rights rally in Hungary has turned into a mass anti

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<v Speaker 1>government demonstration. Tens of thousands of people of march through

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<v Speaker 1>Budapest in a major rebuke of Prime Minister Victor Auban,

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<v Speaker 1>who has curtailed the rights of the queer community over

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<v Speaker 1>the past decade. In March, his government passed a law

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<v Speaker 1>that allows pride marches to be banned, ostensibly to protect children.

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<v Speaker 1>Victor Auburn faces a national election next year after fifteen

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<v Speaker 1>years in power. I'm Daniel James. This is seven am.

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<v Speaker 1>We'll be back tomorrow.