Australia and China trade spying accusations as New Cold War heats up. Photo: Facebook

SYDNEY — The Australian government is under pressure to curb spying activities at a Chinese mission in Adelaide after warnings of an “extreme” threat to the country’s US$65 billion upgrade in naval warfare capability.

Australia’s Defense Department has cited plots from unnamed groups to steal military secrets for its refusal to release briefing notes on naval projects that were prepared for ministers in the ruling Liberal-Nationals coalition.

“These adversaries are highly active in pursuing access to information relating to Australia’s current and future maritime capabilities in order to advance their own interest and undermine Australian capabilities,” the department said in response to a freedom of information request. 

Citing activities by “foreign intelligence services”, it said the information “may be used to directly, or indirectly, damage Australian interests.”

Australia plans to build 54 warships over the next 20 years as part of its biggest defense overhaul since World War II, with most construction work taking place at facilities around the Osborne naval shipyard outside Adelaide.

In February, the shipyard handed over the last of three new air warfare destroyers and work starts this year on nine frigates, with the last being delivered in 2039.

Twelve submarines will be built there from 2022-23, and about half of the 21 patrol boats being added for coastal surveillance.

Australian warship and crew take part in a naval review and maritime parade in Sydney Harbor. Photo: AFP

US firms are supplying weapons systems and electronics for the frigates, with a US$1.5 billion combat package approved by Washington in January.

Spying agencies reportedly are targeting the scores of contractors based around Osborne, including local affiliates of foreign manufacturers like BAE Systems (UK), Raytheon (US), Babcock (UK) and Naval Group (France).

Adelaide also has an airbase that monitors maritime activity in waters to the southwest of Australia and the top-secret testing range of Woomera is located to its north. There are other bases in adjoining Western Australia.

The Defense Department did not identify any particular country as being behind the spying activity, but analysts said the culprit was China, whose relations with Australia have sharply deteriorated over a range of political issues.

Chinese submarines and vessels used for electronic detection are being  spotted with increasing frequency in waters off southwestern Australia.

Beijing opened a permanent consulate in Adelaide in 2017, around the time the fleet modernization was announced, and it has expanded. China said in 2017 that the site, which sprawls for 5,600 square meters and has at least four buildings, would be used for “offices and accommodation.”

“It hasn’t escaped me that the consulate was stood up in the same year that a significant naval shipbuilding program was announced by the coalition government,” said Senator Rex Patrick, who filed the freedom of information request. He said the consulate’s size was obviously excessive.

Aerial view of Australia’s Osbourne naval shipyard. Image: Facebook

“It’s clearly a serious national security issue and the government must do whatever it needs to do to minimize and eliminate this threat,” he said.

Other legislators have urged the government to demand a reduction in the number of personnel at the mission, or to shut it altogether. In July the US forced China to close a consulate in Houston for similar reasons.

An American court also charged two employees of China’s Ministry of State Security with hacking into government and commercial computer systems, including those of an unnamed Australian defense company.

Some opposition politicians believe the government is using the spying claims to prevent scrutiny of the naval upgrade, which has been dogged by accusations of mismanagement, including enormous cost overruns.

Security analysts have cast doubt on the effectiveness of the submarines, and their delivery times. They are being built from a French blueprint that has only been used for nuclear vessels; Australia will use diesel engines. 

Canberra has not commented on activities at China’s Adelaide consulate, but is reluctant to invite a tit-for-tat closure of an Australian mission if it is ordered to shut. Members of its own coalition are pressing for a response.

“If ASIO and law enforcement agencies deem laws have been broken, then the ‘diplomats’ [in Adelaide] should be expelled,” said Liberal Senator Concetta Fierravanti-Wells, who is a former cabinet minister.

The 2016 opening ceremony of China’s consulate in Adelaide, Australia. The facility may soon be closed over spying allegations. Image: Facebook

Mike Burgess, who heads the Australian Security Intelligence Organization (ASIO), the domestic counterintelligence service, warned in February that the threat posed by foreign espionage agencies was “unprecedented.”

“It is higher now than it was at the height of the Cold War. Indeed, some of the tactics being used against us are so sophisticated, they sound like they’ve sprung from the pages of a Cold War thriller,” Burgess added.

He said Australia had become a target for foreign spies because “we are comprehensively retooling our defense force and defense industrial base.”

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