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China Army’s “Department of Enemy Work” Reachs Out to Western Elites in Australia and US

Posted by Author on May 26, 2013

John Garnaut, China correspondent for Fairfax Media-

General Zhang Yang had been in the elite leadership sanctum of the People’s Liberation Army for barely a month when he took time out to greet a former vice-chairman of the US Joint Chiefs of Staff.
Zhang was in the midst of what might have been the most frenetic and high-pressured point of his career. He was leading an austerity and discipline drive for Chairman Xi Jinping who, at that point on December 20, was tightening his grip on military power and testing the territorial defences of Japan and also America’s resolve to protect its ally.

And yet Admiral (retired) Bill Owens was given access to a smorgasbord of People’s Liberation Army generals including some, like Zhang, whom no serving Western military or civilian leaders had been allowed to meet. Owens dined casually with the vice chairman of the Central Military Commission, Xu Qiliang, and his predecessor, Xu Caihou, and has probably spent more time with top Chinese generals in the past six years than have all serving American generals combined.

The Chinese have long recognised the need to build influence in the US but more recently have focused on Australia, which they see as the southern fulcrum of the US pivot.

Chinese military strategists have placed greater importance on Australia since they were caught out by a 2009 defence white paper, which, they argued, had reinforced perceptions of China as a ”threat”.

Last October, two businessmen who rely heavily on China, Kerry Stokes and James Packer, publicly urged Canberra to take a more friendly line with China, following the stationing of US Marines near Darwin and leading up to a new white paper released last month that contained none of the previous contentious statements. Tensions between commercial and security interests are likely to grow.

Zhang holds one of the four most important positions in the Central Military Commission but he is barely noticed by many Western military analysts because he has a job that does not exist in their home systems.

As director of the General Political Department, he is responsible for maintaining discipline, ideological purity and resisting defections in the PLA. One of his responsibilities is to identify weak points and influence decision-making in foreign defence establishments.

Such ”influence operations” are the responsibility of generously funded subordinate department, the Liaison Department. In the early days of the People’s Republic, the department specialised in procuring defections from Kuomintang generals and pursuing the broader objective of ”subverting” and ”disintegrating” the enemy forces associated with Taiwan. It used to be known by a more descriptive moniker: the Department of Enemy Work.

Today, the Liaison Department holds a unique licence to range across Communist Party organisations, civilian intelligence, commercial operations, foreign policy, outward-facing media and powerful horizontal networks of the red princeling aristocracy. It operates a bewildering range of fronts and platforms in the name of everything from oil security to religion. Its goals are only vaguely understood, its methods can seem contradictory, and some of the platforms seem to have played host to the most brazenly warmongering colonels and generals in the PLA.

The Liaison Department has evolved, as China has opened to the world, and it is increasingly focused on influencing elites in the US and close allies.

But there are few analysts who have the language, patience and knowledge to sift through layers of fronts, platforms, fake identities and carefully coded language to identify its operations and attempt to understand what it is they seek.

”Liaison work operates at a nexus of politics, finance, military operations, and intelligence,” says Mark Stokes, a former Pentagon official and executive director of the Project 2049 Institute, who has spent months sifting through reams of online Chinese language material to penetrate and map this most secretive and least understood of political-military intelligence establishments. ”It is responsible for active measures taken to influence foreign defence policies.”

Stokes will soon publish a pioneering detailed report on his findings.

The particular Liaison Department platform that focuses on Western elites is actually one of the most transparent. It’s called the China Association for International Friendly Contacts, or CAIFC, and it is dedicated to ”advancing world peace”, according to its website.

Over the past year, CAIFC has made concerted efforts to reach out to business leaders in Australia. Some of Australia’s most high flying corporate leaders were feted in China by an intelligence platform of the PLA, a Fairfax Media investigation has revealed.

Fortescue Metals heavyweight Andrew Forrest had touted his talks with Chinese business leaders as a lesson on how to build friendship with China. He had been joined by four of five big bank chiefs.

Department director Xing Yunming was photographed with Forrest and others in July last year, although it is understood none of the Australians noted his role in CAIFC or knew of his identity as a lieutenant-general in the PLA.

”CAIFC would be willing to further co-operate with Mr Forrest in making greater contributions to promoting the Sino-Australian people’s friendship,” says a CAIFC summary of comments by Deng Rong, the CAIFC chairman, to Forrest, on the sidelines of the Boao Forum on April 8.

Forrest replied that ”there is an increasingly strong understanding in the Australian business community” that strengthened co-operation with China was a golden opportunity, not to be missed, and this ”consensus has gradually been recognised by those in the Australian political and strategic communities”.

CAIFC has also been increasing its work rate with the American business elite.

A month before Owens’ visit, before the Chinese system shut down for the 18th party congress, CAIFC helped arrange visits for an American business delegation headed by John Mack, the chief executive of investment bank Morgan Stanley in the Hall of Purple Light, in Zhongnanhai. Mack promised to ”educate American politicians” when he returned home, while noting with dismay that Charles Schumer, a reputedly ”China-bashing” senator, had been to China only once. Over the following three days CAIFC hosted John Howard, Tony Blair, and Bill Gates at one of its new platforms, the First China Philanthropy Forum.

Owens said his exchanges had been co-ordinated with the US embassy in Beijing and were separate to his business dealings.

”This has been a purely philanthropic activity for me, and I have never directly or indirectly used these contacts or associations for any commercial purpose,” he said.

Owens had been a former submarine captain, a job traditionally reserved for the brightest and most reliable naval officers. He worked his way up to be the second-ranking US officer and the mastermind for restructuring US Armed Forces in the post-Cold War era.

Owens’ specialisation in commercial-military technology proved useful at a series of telecommunication firms, a Hong Kong private equity firm, and Beijing advisory house he has recently founded, Prometheus, which specialises in overcoming political barriers for cross-border technology transfers and acquisitions. His military background proved useful on the boards of America’s most influential think tanks including Brookings, Carnegie, Rand and the Council on Foreign Relations.

But it is his ”significant philanthropy”, as he calls his sponsorship of an endless stream of retired senior American generals, which has been of greatest value to the Chinese. On this occasion, he brought a former chairman and former commander of the US Strategic Command and also a former US Air Force chief of staff.

China hoped to build ”a new type of military relationship based on equality”, General Zhang was reported as saying in the CAIFC summary of events. Zhang implored his guests to ”make greater contributions to promoting relations between the two countries and the two armies”.

Owens was thus the first American to make direct contact with the new Chinese military leadership although the event went almost unnoticed at the US embassy in Beijing. He has taken a lower profile than when he was building the relationship, when his own summary of proceedings was posted on a financial advisory website.

According to the summary, contained in a document that accompanied a talk he delivered to a non-profit forum, the Pacific Pension Institute, Owens said he was introduced to CAIFC in 2007.

The joint goals of what became known as the Sanya Initiative included laudable goals that Owens still holds.

”I have a great concern about the US-China military-to-military relationship, and I am a believer in the fact that we need to build more trust and transparency between the militaries,” Owens said.

What was intriguing, however, was the stark mismatch between a long list of very specific actions and deliverables agreed by his team of retired American generals – all of which could conceivably work to the military advantage of China – and the complete absence of concrete Chinese commitments in return.

A ”key outcomes” section of his summary of the Sanya Initiative said his group had agreed to attempt to delay a Pentagon report on China’s military power until after the Taiwan election.

They also agreed that the upcoming US election was a ”great opportunity” to influence US-China military relations. They were in the process of arranging a meeting with then presidential hopeful Barack Obama.

Most remarkably, one stated ”outcome” from the initiative was that Owen was working on opinion articles for the media ”to provide a counterpoint to the current writing about China’s military, for example that of Bill Gertz of The Washington Times”.

The CAIFC efforts to delay a US Pentagon report and then restrain US arms sales to Taiwan were unsuccessful. Whether the ”influence operations” had a broader, less measurable effect is impossible to say.

Soon afterwards, however, Admiral Owens published two opinion pieces in the Financial Times calling for America to ”start treating China like a friend” and end arms sales to Taiwan.

Source: The Brisbane Times, Australia

China High-ranking Military Spies Woo Australia Business Leaders

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