Government

Tighter rules for sensitive exports within weeks

As a prominent academic warns of the risk of scientific collaborations with China, the Government is set to crack down on sensitive exports. Sam Sachdeva reports

New, tighter rules restricting sensitive exports with potential military uses are set to be revealed within weeks, with government officials warning of the risks of espionage and foreign interference at New Zealand universities.

The news follows the release of a new research paper from University of Canterbury academic and China expert Anne-Marie Brady on New Zealand’s technology exports to China and the associated risks.

The paper, Holding a Pen in One Hand, Gripping a Gun in the Other, outlines academic and private sector collaborations with Chinese entities that have military as well as civilian affiliations.

“The People’s Liberation Army’s (PLA) rapid militarisation program is accelerating via an international technology transfer strategy, which includes academic exchanges, investment in foreign companies, espionage, and hacking,” the paper states.

“Scientists work globally, so by accessing universities or tech companies in states with an advanced technology sector like New Zealand, the PLA can get a foothold within the international network of scholars working on a given subject area.”

It cites the CCP’s Thousands Talents Plan, designed to bring overseas-educated Chinese citizens and foreign experts back to the country for research work, as among the PLA’s international technology transfer strategies.

While the majority of New Zealand-China scientific partnerships were benign, some relationships involved PLA-affiliated organisations and projects with military end-use applications.

Six of New Zealand’s eight universities had ties with Chinese universities linked to the PLA, while several universities and companies also had strategic partnerships with Chinese companies like Huawei, iFLYTEK and Kuangchi Science that worked closely with the Chinese military and state security sector.

University of Canterbury academic Anne-Marie Brady says New Zealand universities and companies must develop a greater awareness of the potential risks in technology partnerships with China. Photo: Lynn Grieveson.

Brady told Newsroom the paper was a natural follow-up to her Magic Weapons research documenting China’s political influence efforts under the leadership of Xi Jinping.

It was important that the public had an understanding of the risks posed by the export of dual-use technologies and what steps could be taken to prevent that and meet New Zealand’s legal obligations, she said.

“If nobody in New Zealand knows that we do have these measures, then that's not helpful for us because...there’s risk to our reputation internationally, if we don't do the right thing in terms of proliferation.”

Last year, the Ministry of Foreign Affairs and Trade undertook consultation on proposed changes to New Zealand’s “catch-all” export controls, which cover items not on a strategic goods list but that could be used by a police force, militia or armed forces in weaponry.

The proposals would broaden those controls beyond nations subject to a United Nations arms embargo to cover all countries (with exceptions for “like-minded” partners) as well as items that could be used in “activities or operations of a military or police nature”.

Universities push back

Brady only became aware of the proposed changes late in her research process, but said they demonstrated the deep concern from some about the current situation.

MFAT’s plans attracted an outcry from New Zealand universities, who described them as unworkable and likely to have a chilling effect on legitimate research.

Brady labelled those criticisms as “disingenuous”, saying academic institutions risked their reputations and being shut out of collaborations with other international partners if they did not undertake due diligence.

Tools like the Australian Strategic Policy Institute’s (ASPI) China Defence Universities Tracker would help universities to better understand any military ties of their Chinese counterparts.

However, Brady said the Government would also have to consider how to address the funding shortfalls in tertiary education that had led to universities pursuing research grants and financially valuable partnerships with China.

NZ not alone

New Zealand is not alone in reexamining its protections for the export of sensitive goods and technologies.

The US has in recent years tightened its own export controls to curtail what some see as the threat posed by China, while a 2018 report from ASPI’s International Cyber Policy Centre raised concerns about Chinese military collaboration with foreign universities.

The Australian government established a University Foreign Interference Taskforce last August to help protect its university sector against foreign interference, while Japan is currently considering more stringent rules in the same area.

In her latest research, Brady recommends establishing an independent committee of experts similar to Australia’s taskforce, as well as generating greater awareness within the corporate and academic worlds about the risks of technology transfers to China.

An MFAT spokesman warned “universities do face risks of espionage and foreign interference”, which if not managed correctly could “result in a loss of reputation and IP, and damage New Zealand’s national interests”.

In a statement, an MFAT spokesman said the ministry’s review of export controls had been delayed by the Covid-19 response but was nearing completion, and was expected to be formally published via the New Zealand Gazette in a few weeks.

“We constantly review our safeguards across the foreign interference spectrum to ensure we have the right tools to respond to foreign interference as our understanding of it develops. In that respect we do have a range of additional policy [measures] under consideration,” the spokesman said.

Changes to the catch-all controls, as well as recent changes to the Overseas Investment Act, would “significantly mitigate risk” for New Zealand.

However, the spokesman warned that “universities do face risks of espionage and foreign interference”, which if not managed correctly could “result in a loss of reputation and IP, and damage New Zealand’s national interests”.

“It is the responsibility of both universities and government to work together to manage risks. The NZSIS and GCSB offers advice to the commercial, academic and scientific communities on how to recognise and mitigate potential foreign interference related activity.”

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