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International relations

Chinese developer swept up in Australia's red scare

Canberra's counterinfluence campaign against Beijing risks alienating key trading partner

Chinese President Xi Jinping and Communist Party delegates attend the 19th National Congress in October 2017.   © Reuters

SYDNEY -- Wealthy Chinese businessman Huang Xiangmo was once a lavish donor sought after by Australian politicians of all stripes. Now he finds himself in virtual exile abroad, accused of being a proxy for China's Communist Party.

The Australian government has stripped Huang of his permanent residency and barred him from re-entering the country, it was revealed in early February. The property developer is reportedly stuck in Hong Kong, where he is fighting for his return.

The move against Huang represents the first high-profile action against alleged Chinese efforts to influence Canberra's foreign policy toward Beijing from within. But Australian officials risk further angering China, an essential trading partner of the resource-rich economy.

Huang, who entered the media spotlight in 2016, gave a total of roughly 2 million Australian dollars ($1.42 million at current rates) to ruling and opposition parties alike. He has been photographed with big names in Australian political circles, including then-Prime Minister Malcolm Turnbull.

The largesse was legal and aboveboard. But the fact that Huang once chaired the Australian Council for the Promotion of the Peaceful Reunification of China, said to be associated with China's Communist Party, has long cast a cloud over his activities.

Huang's fortunes worsened in 2017, when a recording surfaced of then-Sen. Sam Dastyari defending Beijing's expansionist activities in the South China Sea. Dastyari's remarks directly clashed with the position of his Australian Labor Party. Nor did it help that Huang's property development group had paid legal fees for Dastyari. The senator announced his resignation in December 2017.

The revelations fueled speculation of Chinese diaspora businessmen using their deep pockets to manipulate Australian political rhetoric to favor Beijing. These concerns made Turnbull pivot toward a more leery stance.

Legislation targeting foreigners was introduced in Parliament toward the end of 2017. One bill essentially banned political donations by non-Australian nationals and foreign corporations. Another required individuals working on behalf of overseas-based organizations to register. Both bills passed into law the following year.

Huang has sharply denounced his treatment by the Australian government. "All donations related to myself were made in strict accordance with the Australian laws and regulations, as ironically corroborated by years of aggressive yet futile attacks by certain media outlets," he said in a Feb. 8 statement.

"All donations related to myself were made at the request of the receiving political parties and their representatives as opposed to being proactive offerings," he wrote.

The Australian Security Intelligence Organization flagged not the donations, but items including his current and former chairmanships of groups dedicated to the "peaceful reunification" of Taiwan with mainland China, the statement said.

Opinion here on Huang's case is mixed. Charles Sturt University public ethics professor Clive Hamilton, author of "Silent Invasion: China's Influence in Australia," describes Huang as the most conspicuous figure involved in Chinese influence activities. The real aim of revoking Huang's residency is to weaken his network across Australia, Hamilton said.

The ASIO has long been suspicious of Huang's activities. In 2015, it warned senior officials from Australia's major political parties of mysterious ties between him and the Chinese Communist Party, according to The Sydney Morning Herald newspaper. But Huang's money continued to flow into party coffers.

The Home Affairs Department reportedly revoked Huang's residency on the ASIO's advice. Officially, the federal government has kept mum on the specifics of the decision.

The department can cancel permanent residencies and other visas belonging to noncitizens on "character grounds," even if no crime has been committed. But the abrupt cancellation of Huang's residency, a longtime resident with family and assets in this country, presents an unusual case, said Mary Crock, professor of public law at the University of Sydney.

Crock noted the lack of transparency in Huang's treatment. Viewed from another angle, this turn of events suggest the mounting level of jeopardy the Australian government senses regarding Beijing.

China is Australia's largest trading partner, taking in 30% of Australian exports. For four straight fiscal years through June 2017, China had secured the top spot in terms of approved direct foreign investment. China's involvement has underpinned Australia's economic expansion that has lasted 27 years.

Now China seems to be hitting back at Australia for what it did to Huang, among other recent affronts. Reuters reported that customs officials at the Chinese port city of Dalian have banned imports of Australian coal, starting in February. No reason was given for the decision, first reported Feb. 21 by Reuters.

With the enforcement of the foreign-influence laws, bilateral tensions are sure to rise, warned Richard McGregor, senior fellow at the Sydney-based Lowy Institute.

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