From Schwartz Media. I'm Daniel James. This is seven AM. A sleek Chinese made ute is suddenly one of the most popular vehicles on Australian roads. It's cheap, fast and packed with tech. But behind its rise, our questioned security agencies are struggling to grapple with because the cars we drive today are no longer just cars. They are also data collection tools, and in a tense geopolitical climate, the
lines between convenience and surveillance are blurring today. Senior follow at the Lower Institute and contributed to Australian Foreign Affairs Richard McGregor on the BYD Shark, China's quietly tightening technological grip on Australian infrastructure and what it means for national security. It's Monday, JUNEO, So, Richard, I wanted to start with BYD. These cars are everywhere on Australian roads right now. What can you tell me about them and how they became so popular here?
Well? BYD is actually quite an old company by Chinese standards, at least twenty years old. It was originally a battery company, you know, a Chinese entrepreneur and Shenzen set it up more than a decade ago, Warren Buffett invested in BYD, but it really didn't, you know, start to develop rapidly as a company and as a global company and as a global car company until about three four years ago when their models went well. I guess they started making
better cars. When Chinese EV manufacturing generally started to develop rapidly and in fact become much better, much cheaper, even in some respects more technologically advanced than Western models, and it just became a BMH and Paul, we're sitting inside the bod Shark today. We're going to redo some of the tests and Bad's most popular car in Australia is a Yuit called the Shark six. Is it faster, Yes it is. Has it got more tech in it? Yes it does. Is it cheaper also, yes?
So it's winning at the moment, isn't it.
It's a hybrid, not an EV, but it's past all of the most stringent sort of off road tests that Ossie's throw up for their utes, even more so than Toyota.
One of the things I wanted to do was really push the limit of the Shark.
To do that, you've got to go and cross the simps and desert. I reckon.
It became massively popular very quickly in Australia this year, and I think became one of the largest selling cars in the country in a matter of months.
So for a lot of people, these cars are appealing because they're relatively affordable electrical hybrid vehicles. That's not necessarily how Canberra season, how are they looking at this situation as it's unfolding.
Yeah, I guess the first thing the slight qualification. They're not just affordable, they're good. You know, Chinese tech used to be cheap but not necessarily good. Now Chinese tech is cheap or competitively priced, but also often the best. So that's a totally new ballgame. I guess that's why
Canberra is looking at it with such anxiety. And I guess the key issue here is that everything these days is effectively bundles of software controlled by the host country or companies in the host country and updated by them and having access to them. Now, according to Chinese law, any Chinese company, private, public, or otherwise must give complete access to that country's security services if asked. You know, there's no system of warrants or judicial view or you know,
judges looking at it or anything like that. It's just one and part of the entire system. So countries like Australia which don't have a trusted relationship with China, are we happy with having large parts of the data generated by our economy are potentially open to the Chinese government and Chinese security services.
So what are the concerns that the national security agencies have? I mean, what kind of scenarios are they imagining that can happen with China having access to all of this data.
Yeah, it sounds kind of conspiratorial and crazy, but I think it's pretty straightforward. Let's take the example of cars again, you know cars, electric cars and the like, you know, which in turn are going to become sort of driverless cars. They're always training themselves on the surrounds. In other words, they're little data collecting machines. So they're filming where they're going,
they're processing that data. Often they're filming where they're going and filming faces on the street, for example, and you know, collecting information about citizens. Now, in some respects that's quite normal. You know, evs in America do that as well. That they're all training themselves to be better cars, as it were. But do we worry about an American car like we would like a Chinese car. There are some people in Australia who couldn't care less. There are others who would
be deeply concerned. I think today it's basically common sense that China would be collecting data and using data, just as by the way Facebook does, you know, Instagram does, et cetera, et cetera. Everybody's collecting data, and we as a country have to think about how that's collected, who's collecting it, and how it's used. And at the moment that's dominated by Chinese companies in Australia.
Is there any way that we can store the daily that those cars collect on shore in Australia.
Well, that's one of the debates onshore storage. For example. You know Donald Trump has tried to find ways for TikTok to remain available in the US. Was actually banned by a law passed by Congress. Trump he keeps putting off that ban. And the particular proposal in the United States was to get companies owned by Oracle, the software company, to store TikTok data onshore in the US so it couldn't potentially be accessed by the parent company in China
and by extension, the Chinese authorities. So yes, that is one possible thing that we could do. There are others who say that's not enough or it's not foolproof, because there are other ways of accessing the data and we might struggle to monitor that. But to give you another example about the US, for example, the Biden administration brought in new rules which banned connected cars in other words,
evs collecting data from untrusted entities. In other words, it's China from the United States, a rule that comes into force in twenty twenty seven. Would we do that? You know, it would be very hard to do that in Australia. In the US, there aren't many Chinese ebs in Australia. We don't tariff cars anymore. We gave up our car industry a bit over a decade ago. So you know, the influx of Chinese cars has been great for Australian consumers.
And it's the government really going to force consumers to pay more or force those cars out. That's very difficult to see. It's a very costly decision, costly economically, of course, but costly diplomatically as well.
With China and a great technical challenge too.
Would imagine it's a technical challenge particularly from middle sized economy like Australia, which doesn't have the resources of China or the United States.
After the break the diplomatic impact of banning Chinese technology, Richard, we're talking about Canberra's security concerns around Chinese technology and the Chinese government's access to our data. So has our government ever acted on these concerns.
To give you a context here, let me take you back to twenty eighteen when the then government of Prime Minister Malcolm Turnbull effectively banned the Chinese Telecommunications Company by Way from bidding to be the sort of chief contractor for Australia's five G TELCA network.
The decision we took was really one based on hedging against future risks. I mean, the reality is the nature of the five G network is that you cannot any longer reasonably distinguish between the core and the radio access network.
And this was basically because the government decided that they couldn't be sure that effectively Australia would maintain control and access to the network. You know, should there be a conflict of any kind, should relations with China plummet dramatically.
Intent can change in a heartbeat, so you've got to hedge and take into how the risk that intent can change in the years ahead. Remember a threat as a combination of capability and intent, So in areas of national security where naturally cautious, prudent and hedging.
And that was a big decision at the time. It was one of the tipping points in the change in attitude of Beijing to Australia and which resulted in China taking punitive trade measures against Australia in twenty twenty you know, banning wine, bali, lobsters, coal, et cetera, et cetera.
And relations between China and Australia appear to be further deteriorating China's.
China has banned bali imports from Australia's largest exporter CBH, claiming the product had harmful weeds in its grain.
If this is confirmed by the government, the move would further inflame tensions between the two countries, which appear to be heading towards a trade hall.
But if you go fast forward now twenty twenty five, in retrospect, the Highwai decision looks very easy because it was cost free. Effectively cost free in this respect, we didn't have to rip anything out of our telecommunications network. We just bought a different system from Rickson. But now, if you look at the Australian consumer and industrial economy and the evs or hybrid vehicles are part of this,
it's dominated by China evs. Eighty percent or so of evs and Australia are made in China, including Teslas, by the way, which are made in the Tesla factory in Shanghai. The same goes for solar panels, are same goes for wind farms. So the five G decision was easy in retrospect. But imagine the impact of a decision now of the Australian government to somehow regulate Chinese electric vehicles and hybrid vehicles.
And as consumers, Richard, do you think people should be worried about their data being gathered by byd and other Chinese companies and given to the Chinese government.
Look, I don't think individual Australians necessarily have to worry. You know, your data or my data is not particularly meaningful to the Chinese. But we do have a duty and obligation to protect parts of the Australian economy, individuals in Australia who particularly play a role in the national security establishment. It's basically about sovereignty one way or another.
You know, are we able as a sovereign nation to manage our own data and stop it being accessed by foreign entities that we don't trust and that we're in conflict with on other issues. So you don't want to induce sort of, you know, widespread paranoia about every bit of Chinese technology. You've got to make judgments in particular cases, and if there is a risk, you have to try and mitigate that risk.
Have we ever faced a large skyle sober attack from another country before?
We have not, as far as I know, we have faced You know, a lot of entities in Australia have suffered cyber intrusions or cyber attacks if you like, but they're usually by private hackers, people we would call hackers Russians in the like. It might be Chinese entities as well. It could be all sorts of people, but not by a nation state, and that's very different. You know, countries like Taiwan, for example. I think Taiwan is the country which suffers the most cyber attacks by a state entity,
obviously China in that case. You know, Taiwan is quite an advanced technological economy, but it is pretty helpless in the face of Chinese attacks and the like. So we're vulnerable. Everybody is vulnerable. I guess the issue here is the intent of a nation state in conducting a cyber attack
on Australia. Why would they be doing it? What would they attack that The sorts of cyber attacks which have been rehearsed against the United States by the Chinese is turning off the water supply at different places for example. You know, you want to stop troops moving in the country, cut off the water near them, cut off the electricity in the light. So it's that sort of thing. Now, not making a moral point here, you know, I presume that the Americans are rehearsing the same sort of cyber
intusions as the Chinese. It's a matter of you know, how a country is smaller country like Australia protects itself against that if it doesn't stop at how it identifies that attack, and how it shuts it down and then recovers from it.
Richard, thank you so much for your time.
Thank you very much.
You can read Richard McGregor's artical Trojan Horses How to Defend against Chinese Technology in the new edition of Australian Foreign Affairs. It's out today. Just before we go, I want to let you know that today's episode is our lastest part of Schwartz Media. Seven Am will continue in the same format, with the same team and in the same feed, but with new owners, an independent media company called Solstice Media. We love making the show and our
commitment to independent journalism is stronger than ever. We have some exciting episodes planned and we hope you continue to follow and support our work. Also in the news tenure, Plippersek has criticized objections within the Liberal Party to apply quotas to address gender equity in the party. Pliposek told ABC News the Coalition is happy to have quotas for National Party and ps on the front bench, but rejects quotas to a dressed their unequal balance between men and
women in Federal Parliament. Following Opposition leader Susan Lee's signaling she's open to the idea of quotas, shadowed Defense Minister and Lee's rival in the recent leadership stout, Shangus Taylor said he opposes changes that would promote Liberal women into winnable seats. Women make up less than a third of the Liberal Party's parliamentary team and a band LGBTQIA plus rights rally in Hungary has turned into a mass anti
government demonstration. Tens of thousands of people of march through Budapest in a major rebuke of Prime Minister Victor Auban, who has curtailed the rights of the queer community over the past decade. In March, his government passed a law that allows pride marches to be banned, ostensibly to protect children. Victor Auburn faces a national election next year after fifteen years in power. I'm Daniel James. This is seven am. We'll be back tomorrow.