SYDNEY, Australia — When Craig Chung, an up-and-coming Sydney city councilor, meets with former officials from the United States, neither the media nor his constituents seem to care.
But for events with fellow ethnic Chinese, he errs on the side of caution. He researches the people involved. He sidesteps certain photographs and publicly declares whom he talks to and why — all to ensure he doesn’t end up accused of associating with someone tied to the Chinese Communist Party.
“There is this fear that we may work closely with somebody who is accused of being an agent of another government,” said Mr. Chung, 49, a fourth-generation Chinese-Australian. “We’re in a position now where people are running scared.”
Australia has been thrown into turmoil over allegations that China is trying to buy its politicians and sway its elections, charges that have led to increased scrutiny of the rising superpower’s efforts to influence Australia — and fears that a campaign to stamp out Chinese influence risks becoming a McCarthy-esque witch hunt.
The Chinese government has been using proxies in Australia for years to polish its image and press for its priorities, including reunification with Taiwan and sovereignty over the South China Sea. These efforts have intensified under President Xi Jinping, who seems to view Australia — which has benefited greatly from trade with China — as a laboratory for efforts to sway opinion abroad and increase China’s global influence.
In practice, that means China-born tycoons with ties to the Communist Party have exploited Australia’s weak campaign finance laws to donate millions to Australian political parties. Chinese diplomats have also mobilized Chinese students to attend rallies and to speak out against what they see as anti-Chinese views, while the local Chinese-language media tends to follow the fiercely nationalistic tone set by China’s state-run outlets.
But a thunderous backlash has now erupted — with a public outcry condemning anyone accused of links to Chinese influence, and a series of new bills that would strengthen espionage laws, outlaw foreign political donations and criminalize efforts to interfere in Australian democracy.
Critics of the legislation, including human rights groups, worry that it, and the intensity of anti-China sentiment, will squash legitimate debate and unfairly target Australia’s large and diverse ethnic Chinese community.
“The issue is real, but it’s easy to exaggerate it, and I think we’re in danger of that at the moment,” said Hugh White, a prominent defense strategist who has himself sounded the warning about China, saying that the country’s rise could drive Australia to acquire nuclear weapons. “There’s been a head of steam built up around this, and it’s not too far from a moral panic.”
Mr. White and others say that the suspicions about China and Chinese-Australians reflect broader anxieties about an emerging geopolitical reality: The United States has become less reliable, while China plays an increasingly dominant role in both Australia’s economy and its changing demographics.
For the past five years, more of Australia’s new immigrants have come from China than from any other country, according to the 2016 census. Australia now has more than one million ethnic Chinese, making up 5.6 percent of the overall population, a percentage on par with that of the entire Asian-American population in the United States.
The resulting influence, both economic and cultural, is a delicate subject. China is Australia’s largest trading partner, whose voracious consumption of Australian iron ore, coal and other exports has lifted Australia’s economy.
But many Australians become more ambivalent when discussing Chinese students — who pump $18 billion per year into the university system — or Chinese investment in Australian real estate and agricultural land.
“We don’t really know how to think about China because it’s not an ally but it’s not an enemy,” said Mr. White, who is now a professor at Australian National University. “We are really facing something that is new in our national experience.”
Many of Australia’s institutions have yet to catch up.
Despite Australia’s proud multiculturalism, Chinese language classes are still uncommon in public schools. Cities like Sydney are highly segregated by race. And if Australia’s Parliament were a suburb, as one local writer recently put it, it would be among the least diverse in the country.
Given the furor over Chinese political influence, many Chinese-Australians fear that the new espionage and foreign influence laws could further isolate them.
Beijing has expressed similar concerns. “Words and actions brimming with prejudice are spoiling the normal atmosphere of Chinese-Australian relations,” said a recent editorial in People’s Daily, the main newspaper of the Chinese Communist Party.
On Tuesday, the Chinese consulate in Melbourne issued a “safety reminder” to Chinese students in Australia, warning them to be careful after what it called “several incidents of insults and assaults on Chinese students” in recent days.
As an ethnic minority, some Chinese-Australians see an identity associated with a stronger China as a path to more respect. Others have family and business ties in China that make them afraid to express dissent with Beijing.
But Australia’s Chinese community has roots reaching back more than a century, and its growing numbers include people from Taiwan, Hong Kong and elsewhere, not just mainland China.
Many are quick to gush about Australian life. But they also demand to know why Chinese-Australians are so absent from board rooms and the media, and why simply buying an apartment is somehow viewed as suspicious.
“The Chinese community cops a fair bit of discrimination just based on the way that people look already,” said Mr. Chung, a member of the governing center-right Liberal party. “I’m concerned that this legislation is going to set aside Chinese-Australians from every other Australian.”
Prime Minister Malcolm Turnbull has emphasized that the proposed laws are not explicitly aimed at China, or Australia’s Chinese. “We must ensure Australian democracy is resilient to all threats, from any country,” he said when he introduced the bill on foreign interference on Dec. 7.
The new legislation was drawn from the intelligence community’s assessment of global threats, said George Brandis, the attorney general until being named high commissioner to the United Kingdom in a cabinet reshuffle this week. Mr. Brandis also said it was American-inspired, reflecting the lessons from the 2016 presidential election in the United States and the evidence of Russian attempts to meddle in the outcome.
The proposed Australian legislation will be similar to American laws banning foreign donations and requiring registration for those working on behalf of a foreign country or organization, he said, but with a broader mandate for what must be disclosed, plus tougher enforcement for a range of activities.
This includes criminalizing actions that fall short of outright espionage but that are deemed to interfere with an “Australian democratic or political right or duty.”
“One of the striking features of the American system is its vagueness or the highly generic way in which political interference is defined,” Mr. Brandis said. “Under the Australian scheme there is a very specific description of what constitutes foreign interference.”
Many Chinese-Australians with firsthand knowledge of Beijing’s heavy hand have welcomed the bill.
“This is an exciting development indeed, although it should have happened earlier,” said Feng Chongyi, an associate professor at the University of Technology Sydney, who was detained last year by the Chinese authorities during a research visit.
He and several other prominent critics of China said that at the very least, the law would deter China from pressuring Chinese students at Australian universities, and from using proxies to influence politics with donations.
The latter issue has already claimed the career of one politician: An opposition Labor Party senator, Sam Dastyari, resigned this month amid accusations that he did China’s bidding at the behest of China-born donors. For weeks, he was pilloried in the media and by opponents as a symbol of China’s efforts to compromise Australian democracy.
Chinese influence also became a focal point of the recent race for an open seat in Parliament from a heavily Chinese area of Sydney, with the Liberal candidate, John Alexander, a former professional tennis player, surviving accusations that the government was whipping up anti-China sentiment to win the seat, preserving Prime Minister Turnbull’s majority.
But concerns about Chinese influence show no signs of abating. Media outlets have eagerly reported Australian intelligence findings, often citing anonymous sources, including a report linking 10 as-yet-unnamed candidates in local and state elections to Chinese intelligence agencies.
Many of these politicians accused of being “Manchurian candidates” are said to be in areas with large immigrant populations, adding to the swirl of charges and paranoia.
“What we’re seeing play out there are the somewhat toxic politics of national security, which have swamped countries around the West since 9/11,” Mr. White said. “There is a grave danger of us overreacting.”
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