WEBVTT - Your BYD car is watching you

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<v Speaker 1>I'm Daniel James, and you're listening to seven AM. A

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

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

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

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

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<v Speaker 1>today are no longer just cars. They're also data collection tools,

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<v Speaker 1>and in a tense geopolitical climate, the lines between convenience

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<v Speaker 1>and surveillance are blurring today. Senior follow at the Loewey

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<v Speaker 1>Institute and contributed to Australian Foreign Affairs Richard McGregor on

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

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<v Speaker 1>infrastructure and what it means for national security. It's Sunday,

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<v Speaker 1>November twenty three. This episode was originally published in June.

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<v Speaker 1>Sir Richard, I wanted to start with BYD. These cars

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<v Speaker 1>are everywhere on Australian roads right now. What can you

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<v Speaker 1>tell me about them and how they became 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 bermouth. 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 year 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 3>So it's winning it But 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 tow up for their utes, even more so than Toyota.

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<v Speaker 2>One of the things I wanted to do was really

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<v Speaker 2>push the limit of the Shark to do that, you've

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<v Speaker 2>got to go and cross the Simpson Desert.

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<v Speaker 1>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 sees it. How are they looking at this

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<v Speaker 1>situation 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 security services if asked. You know,

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<v Speaker 2>there's no system of warrants or judicial review 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 Australia,

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

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

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

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<v Speaker 2>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

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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 on

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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 day

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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, for it's not fool proof,

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

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

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

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

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<v Speaker 2>words evs collecting data from untrusted entity in other words,

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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 evs 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 with China.

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<v Speaker 1>And a great technical challenge too.

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<v Speaker 2>I would imagine it's a technical challenge particularly from middle

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

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<v Speaker 2>China 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 4>The decision we took was really one based on hedging

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<v Speaker 4>against future risks. I mean, the reality is the nature

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<v Speaker 4>of the five G network is that you cannot any

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<v Speaker 4>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 4>Intent can change in a heartbeat, So you've got to

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<v Speaker 4>hedge and take into how the risk that intent can

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<v Speaker 4>change in the years ahead. Remember a threat as a

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<v Speaker 4>combination of capability and intent, So in areas of national

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<v Speaker 4>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 3>And relations between China and Australia appear to be further deteriorating.

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

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

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<v Speaker 3>If this is confirmed by the government, the move would

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<v Speaker 3>further inflame tensions between the two countries which appear to

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<v Speaker 3>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 Hiawai 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 Tradian

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

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

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<v Speaker 2>cyber 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 article Trope and Horses, How

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<v Speaker 1>to Defend against Chinese Technology and the new edition of

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<v Speaker 1>Australian Foreign Affairs. It's out today. Thanks for listening. Tomorrow

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<v Speaker 1>on the show, I'm bringing you an interview with one

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<v Speaker 1>of the very few journalists still reporting from Moscow. Cape Tapuri,

0:14:25.280 --> 0:14:29.040
<v Speaker 1>has been tracking how in wartime Russia President Vladimir Putin's

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<v Speaker 1>allegiances are shifting. For decades, Putin's governed through a network

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<v Speaker 1>of loyal elites, oligarch's bureaucrats, security chiefs, each rewarded for

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<v Speaker 1>their obedience and connections. But since the evasion of Ukraine,

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<v Speaker 1>the system has begun to fracture. The old elite are

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<v Speaker 1>being sidelined and a new caste is emerging. Relatives, idelogus,

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<v Speaker 1>battlefield loyalists. You tie their futures to the war. I've

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<v Speaker 1>got to say it's a fascinating conversation. I'm Daniel James

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<v Speaker 1>is seven, a yen see to murray