Speaker 1: I'm Daniel James, and you're listening to seven AM. A
Speaker 1: sleek Chinese made ute is suddenly one of the most
Speaker 1: popular vehicles on Australian roads. It's cheap, fast and packed
Speaker 1: with tech. But behind its rise, our questioned security agencies
Speaker 1: are struggling to grapple with because the cars we drive
Speaker 1: today are no longer just cars. They're also data collection tools,
Speaker 1: and in a tense geopolitical climate, the lines between convenience
Speaker 1: and surveillance are blurring today. Senior follow at the Loewey
Speaker 1: Institute and contributed to Australian Foreign Affairs Richard McGregor on
Speaker 1: the BYD Shark, China's quietly tightening technological grip on Australian
Speaker 1: infrastructure and what it means for national security. It's Sunday,
Speaker 1: November twenty three. This episode was originally published in June.
Speaker 1: Sir Richard, I wanted to start with BYD. These cars
Speaker 1: are everywhere on Australian roads right now. What can you
Speaker 1: tell me about them and how they became so popular here?
Speaker 2: Well. BYD is actually quite an old company by Chinese standards,
Speaker 2: at least twenty years old. It was originally a battery company,
Speaker 2: you know, a Chinese entrepreneur and Shenzen set it up
Speaker 2: more than a decade ago. Warren Buffett invested in BYD,
Speaker 2: but it really didn't, you know, start to develop rapidly
Speaker 2: as a company and as a global company and as
Speaker 2: a global car company until about three four years ago
Speaker 2: when their models went well. I guess they started making
Speaker 2: better cars. When Chinese EV manufacturing generally started to develop
Speaker 2: rapidly and in fact become much better, much cheaper, even
Speaker 2: in some respects more technologically advanced than Western models, and
Speaker 2: it just became a bermouth. And Paul, we're sitting inside
Speaker 2: the bod Shark today. We're going to redo some of
Speaker 2: the tests and Bad's most popular car in Australia is
Speaker 2: a year called the Shark six. Is it faster, yes
Speaker 2: it is. Has it got more tech in it? Yes
Speaker 2: it does. Is it cheaper also yes?
Speaker 3: So it's winning it But moment isn't it.
Speaker 2: It's a hybrid, not an EV. But it's past all
Speaker 2: of the most stringent sort of off road tests that
Speaker 2: Ossie's tow up for their utes, even more so than Toyota.
Speaker 2: One of the things I wanted to do was really
Speaker 2: push the limit of the Shark to do that, you've
Speaker 2: got to go and cross the Simpson Desert.
Speaker 1: I reckon.
Speaker 2: It became massively popular very quickly in Australia this year,
Speaker 2: and I think became one of the largest selling cars
Speaker 2: in the country in a matter of months.
Speaker 1: So for a lot of people, these cars are appealing
Speaker 1: because they're relatively affordable electrical hybrid vehicles. That's not necessarily
Speaker 1: how Canberra sees it. How are they looking at this
Speaker 1: situation as it's unfolding.
Speaker 2: Yeah, I guess the first thing the slight qualification. They're
Speaker 2: not just affordable, they're good. You know, Chinese tech used
Speaker 2: to be cheap but not necessarily good. Now Chinese tech
Speaker 2: is cheap or competitively priced, but also often the best.
Speaker 2: So that's a totally new ballgame. I guess that's why
Speaker 2: Canberra is looking at it with such anxiety. And I
Speaker 2: guess the key issue here is that everything these days
Speaker 2: is effectively bundles of software controlled by the host country
Speaker 2: or companies in the host country and updated by them
Speaker 2: and having access to them. Now, according to Chinese law,
Speaker 2: any Chinese company, private, public, or otherwise must give complete
Speaker 2: access to that country security services if asked. You know,
Speaker 2: there's no system of warrants or judicial review or you know,
Speaker 2: judges looking at it or anything like that. It's just
Speaker 2: one and part of the entire system. So countries like Australia,
Speaker 2: which don't have a trusted relationship with China, are we
Speaker 2: happy with having large parts of the data generated by
Speaker 2: our economy are potentially open to the Chinese government and
Speaker 2: Chinese security services.
Speaker 1: So what are the concerns that the national security agencies have?
Speaker 1: I mean, what kind of scenarios are they imagining that
Speaker 1: can happen with China having access to all of this data.
Speaker 2: Yeah, it sounds kind of conspiratorial and crazy, but I
Speaker 2: think it's pretty straightforward. Let's take the example of cars again,
Speaker 2: you know cars, electric cars and the like, you know,
Speaker 2: which in turn are going to become sort of driverless cars.
Speaker 2: They're always training themselves on the surrounds. In other words,
Speaker 2: they're little data collecting machines. So they're filming where they're going,
Speaker 2: they're processing that data. Often they're filming where they're going
Speaker 2: and filming faces on the street, for example, and you
Speaker 2: collecting information about citizens. Now, in some respects that's quite normal.
Speaker 2: You know, evs in America do that as well. That
Speaker 2: they're all training themselves to be better cars, as it were.
Speaker 2: But do we worry about an American car like we
Speaker 2: would like a Chinese car. There are some people on
Speaker 2: Australia who couldn't care less. There are others who would
Speaker 2: be deeply concerned. I think today it's basically common sense
Speaker 2: that China would be collecting data and using data, just
Speaker 2: as by the way Facebook does, you know, Instagram does,
Speaker 2: et cetera, et cetera. Everybody's collecting data and we as
Speaker 2: a country have to think about how that's collected, who's
Speaker 2: collecting it, and how it's used. And at the moment
Speaker 2: that's dominated by Chinese companies in Australia.
Speaker 1: Is there any way that we can store the day
Speaker 1: that those cars collect on shore in Australia.
Speaker 2: Well, that's one of the debates onshore storage. For example.
Speaker 2: You know Donald Trump has tried to find ways for
Speaker 2: TikTok to remain available in the US. Was actually banned
Speaker 2: by a law passed by Congress. Trump he keeps putting
Speaker 2: off that ban, And the particular proposal in the United
Speaker 2: States was to get companies owned by Oracle, the software company,
Speaker 2: to store TikTok data onshore in the US, so it
Speaker 2: couldn't potentially be accessed by the parent company in China
Speaker 2: and by extension, the Chinese authorities. So yes, that is
Speaker 2: one possible thing that we could do. There are others
Speaker 2: who say that's not enough, for it's not fool proof,
Speaker 2: because there are other ways of accessing the data and
Speaker 2: we might struggle to monitor that. But to give you
Speaker 2: another example about the US, for example, the Biden administration
Speaker 2: brought in new rules which banned connected cars in other
Speaker 2: words evs collecting data from untrusted entity in other words,
Speaker 2: China from the United States, a rule that comes into
Speaker 2: force in twenty twenty seven. Would we do that? You know,
Speaker 2: it would be very hard to do that in Australia.
Speaker 2: In the US, there aren't many Chinese evs in Australia.
Speaker 2: We don't tariff cars anymore. We gave up our car
Speaker 2: industry a bit over a decade ago. So you know,
Speaker 2: the influx of Chinese cars has been great for Australian consumers.
Speaker 2: And it's the government really going to force consumers to
Speaker 2: pay more or force those cars out. That's very difficult
Speaker 2: to see. It's a very costly decision, costly economically of course,
Speaker 2: but costly diplomatically as well with China.
Speaker 1: And a great technical challenge too.
Speaker 2: I would imagine it's a technical challenge particularly from middle
Speaker 2: sized economy like Australia, which doesn't have the resources of
Speaker 2: China or the United States.
Speaker 1: After the break the diplomatic impact of banning Chinese technology, Richard,
Speaker 1: we're talking about Canberra's security concerns around Chinese technology and
Speaker 1: the Chinese government's access to our data. So has our
Speaker 1: government ever acted on these concerns.
Speaker 2: To give you a context here, let me take you
Speaker 2: back to twenty eighteen when the then government of Prime
Speaker 2: Minister Malcolm Turnbull effectively banned the Chinese Telecommunications Company by
Speaker 2: Way from bidding to be the sort of chief contractor
Speaker 2: for Australia's five G TELCA network.
Speaker 4: The decision we took was really one based on hedging
Speaker 4: against future risks. I mean, the reality is the nature
Speaker 4: of the five G network is that you cannot any
Speaker 4: longer reasonably distinguish between the core and the radio access network.
Speaker 2: And this was basically because the government decided that they
Speaker 2: couldn't be sure that effectively Australia would maintain control and
Speaker 2: access to the network. You know, should there be a
Speaker 2: conflict of any kind, should relations with China plummet dramatically.
Speaker 4: Intent can change in a heartbeat, So you've got to
Speaker 4: hedge and take into how the risk that intent can
Speaker 4: change in the years ahead. Remember a threat as a
Speaker 4: combination of capability and intent, So in areas of national
Speaker 4: security where naturally cautious, prudent and hedging.
Speaker 2: And that was a big decision at the time. It
Speaker 2: was one of the tipping points in the change in
Speaker 2: attitude of Beijing to Australia and which resulted in China
Speaker 2: taking punitive trade measures against Australia in twenty twenty you know,
Speaker 2: banning wine, bali, lobsters, coal, et cetera, et cetera.
Speaker 3: And relations between China and Australia appear to be further deteriorating.
Speaker 2: China's China has banned bali imports from Australia's largest exporter CBH,
Speaker 2: claiming the product had harmful we in its grain.
Speaker 3: If this is confirmed by the government, the move would
Speaker 3: further inflame tensions between the two countries which appear to
Speaker 3: be heading towards a trade hall.
Speaker 2: But if you go fast forward now twenty twenty five,
Speaker 2: in retrospect, the Hiawai decision looks very easy because it
Speaker 2: was cost free, effectively cost free in this respect, we
Speaker 2: didn't have to rip anything out of our telecommunications network.
Speaker 2: We just bought a different system from Rickson. But now,
Speaker 2: if you look at the Australian consumer and industrial economy
Speaker 2: and the evs or hybrid vehicles are part of this,
Speaker 2: it's dominated by China. Evs. Eighty percent or so of
Speaker 2: evs and Australia are made in China, including Teslas, by
Speaker 2: the way, which are made in the Tesla factory in Shanghai.
Speaker 2: The same goes for solar panels, are same goes for
Speaker 2: wind farms. So the five G decision was easy in retrospect.
Speaker 2: But imagine the impact of a decision now of Tradian
Speaker 2: government to somehow regulate Chinese electric vehicles and hybrid vehicles.
Speaker 1: And as consumers, Richard, do you think people should be
Speaker 1: worried about their data being gathered by byd and other
Speaker 1: Chinese companies and given to the Chinese government.
Speaker 2: Look, I don't think individual Australians necessarily have to worry.
Speaker 2: You know, your data or my data is not particularly
Speaker 2: meaningful to the Chinese. But we do have a duty
Speaker 2: and obligation to protect parts of the Australian economy, individuals
Speaker 2: in Australia who particularly play a role in the national
Speaker 2: security establishment. It's basically about sovereignty one way or another.
Speaker 2: You know, are we able as a sovereign nation to
Speaker 2: manage our own data and stop it being accessed by
Speaker 2: foreign entities that we don't trust and that we're in
Speaker 2: conflict with on other issues. So you don't want to
Speaker 2: induce sort of, you know, widespread paranoia about every bit
Speaker 2: of Chinese technology. You've got to make judgments in particular cases,
Speaker 2: and if there is a risk, you have to try
Speaker 2: and mitigate that risk.
Speaker 1: Have we ever faced a large skyle sober attack from
Speaker 1: another country before?
Speaker 2: We have not, as far as I know, we have
Speaker 2: faced You know, a lot of entities in Australia have
Speaker 2: suffered cyber intrusions or cyber attacks if you like, but
Speaker 2: they're usually by private hackers, people we would call hackers
Speaker 2: Russians in the like. It might be Chinese entities as well.
Speaker 2: It could be all sorts of people, but not by
Speaker 2: a nation state, and that's very different. You know, countries
Speaker 2: like Taiwan, for example. I think Taiwan is the country
Speaker 2: which suffers the most cyber attacks by a state entity,
Speaker 2: obviously China. In that case, you know, Taiwan is quite
Speaker 2: an advanced technological economy, but it is pretty helpless in
Speaker 2: the face of Chinese attacks and the like. So we're vulnerable.
Speaker 2: Everybody is vulnerable. I guess the issue here is the
Speaker 2: intent of a nation state in conducting a cyber attack
Speaker 2: on Australia. Why would they be doing it? What would
Speaker 2: they attack that the sorts of cyber attacks which have
Speaker 2: been rehearsed against the United States by the Chinese is
Speaker 2: turning off the water supply at different places for example.
Speaker 2: You know, you want to stop troops moving in the country,
Speaker 2: cut off the water near them, cut off the electricity
Speaker 2: in the light. So it's that sort of thing. Now,
Speaker 2: I'm not making a moral point here, you know, I
Speaker 2: presume that the Americans are rehearsing the same sort of
Speaker 2: cyber intusions as the Chinese. It's a matter of you know,
Speaker 2: how a country is smaller country like Australia protects itself
Speaker 2: against that if it doesn't stop at how it identifies
Speaker 2: that attack, and how it shuts it down and then
Speaker 2: recovers from it.
Speaker 1: Richard Thank you so much for your time.
Speaker 2: Thank you very much.
Speaker 1: You can read Richard McGregor's article Trope and Horses, How
Speaker 1: to Defend against Chinese Technology and the new edition of
Speaker 1: Australian Foreign Affairs. It's out today. Thanks for listening. Tomorrow
Speaker 1: on the show, I'm bringing you an interview with one
Speaker 1: of the very few journalists still reporting from Moscow. Cape Tapuri,
Speaker 1: has been tracking how in wartime Russia President Vladimir Putin's
Speaker 1: allegiances are shifting. For decades, Putin's governed through a network
Speaker 1: of loyal elites, oligarch's bureaucrats, security chiefs, each rewarded for
Speaker 1: their obedience and connections. But since the evasion of Ukraine,
Speaker 1: the system has begun to fracture. The old elite are
Speaker 1: being sidelined and a new caste is emerging. Relatives, idelogus,
Speaker 1: battlefield loyalists. You tie their futures to the war. I've
Speaker 1: got to say it's a fascinating conversation. I'm Daniel James
Speaker 1: is seven, a yen see to murray