Category Archives: M

… and M was once thought to be a Chinese spy.

Back in 1990 when I first met M, then very recently arrived in Australia, I was living in Paddington at PK’s place – and a nice place it was too. The first morning M appeared at breakfast PK was quite nonplussed – being of Lithuanian background he had fairly strong Cold War views in some respects, though not in others. He did indeed suggest soon after that M may be a Chinese spy. He later changed his mind and may even deny the story today. 😉

No doubt among the very large influx of Chinese students at that post-Tiananmen time there would have been some spies, mostly there to monitor the other students. Chinese were used to being monitored. M solved the problem back home in China by joining the neighbourhood spooks – hiding in plain sight, you could say. The neighbourhood committee of spooks also had a benign role; as well as reporting suspicious activity they were agents too of social welfare. M claimed he was particularly lax on the reporting side, especially given his own association with quite a few westerners.

My students at the language college I then worked in more or less assumed someone could be a spy, or “a boss” as they tended to say, and sussed one another out before they started opening up about certain topics.

About a decade later I was offered a free trip to Shanghai by the parents of one of my SBHS students – and not to influence me, as it was offered after the exams. As M said, they were just being Chinese and were grateful I had helped their son. I found a face-saving way of refusing the gift.

Where I tutor in Chinatown there is a prominent display on the wall of photos of the principals in the company with leading pollies, including Mr Ruddock. This is part of the Chinese way of business – establishing your connections or guanxi.*

“Guanxi” literally means "relationships", stands for any type of relationship. In the Chinese business world, however, it is also understood as the network of relationships among various parties that cooperate together and support one another. The Chinese businessmen mentality is very much one of "You scratch my back, I’ll scratch yours." In essence, this boils down to exchanging favors, which are expected to be done regularly and voluntarily. Therefore, it is an important concept to understand if one is to function effectively in Chinese society.

The importance of "Guanxi"

Regardless of business experiences in ones home country, in China it is the right "Guanxi" that makes all the difference in ensuring that business will be successful. By getting the right "Guanxi", the organization minimizes the risks, frustrations, and disappointments when doing business in China. Often it is acquiring the right "Guanxi" with the relevant authorities that will determine the competitive standing of an organization in the long run in China. And moreover, the inevitable risks, barriers, and set-ups you’ll encounter in China will be minimized when you have the right “Guanxi” network working for you. That is why the correct "Guanxi" is so vital to any successful business strategy in China.

Although developing and nurturing the "Guanxi" in China is very demanding on time and resources, the time and money necessary to establish a strong network is well worth the investment. What your business could get in return from the favors for your partners are often more much more valuable, especially in the long run, and when you’re in need. Even domestic businesses in China establish wide networks with their suppliers, retailers, banks, and local government officials. It is very common for individuals of an organization to visit the residence of their acquaintances from other organizations, bringing gifts (such as wine, cigarettes, etc.). While this practice may seem intrusive, as you spend more time learning the Chinese culture, it will become easier to understand and take part in this practice that is so central to successful Chinese commercial activity…

We should keep this in mind as we contemplate the Joel Fitzgibbon affair and the activities of Ms Liu. Still, the narrative is very much, and not entirely wrongly, taking what I may call the PK route. See Greg Sheridan in today’s Australian.

NO nation makes a greater espionage effort directed at Australian military and commercial technology than does China.

It was because of China’s massively increased espionage activities in recent years that in 2004 the Australian Security Intelligence Organisation set up a new counter-espionage unit.

But the problems China poses for a country such as Australia in the security and espionage field extend far beyond what might be regarded as traditional espionage.

Beijing has the most unified and co-ordinated sense of national power of any big nation on Earth. Modern China is not a democracy, but it is a very effectively functioning modern state.

It has a highly competent bureaucracy that seeks to penetrate all sectors of Chinese society and serve what the ruling Communist Party regards as the broader national interest. This includes monitoring, and where possible influencing, Chinese business people and students in their activities overseas.

This is a highly elusive matter, extremely difficult to quantify.

The overwhelming majority of people of Chinese ethnic background living in Western societies such as Australia or the US have no relationship with the Chinese state.

And most of those who do have any relationship with the Chinese state have an entirely wholesome one, such as doing business with the Government or promoting cultural exchange.

But the Chinese Government seeks to use every resource it can to gain information and to exercise power. That includes, on the testimony of Chinese defectors and Western intelligence agencies, often using business people and students as agents where it can recruit them…

He isn’t entirely wrong, far from it in fact, and does at least qualify what he says; but the framing of what he says does tend towards suspicion of Fitzgibbon and Liu, and Fitzgibbon must have been especially dense not to have declared those two trips.

And of course they spy, we gather intelligence – but that is another matter.

Back in the mid 90s I had the opportunity to meet the former Minister of Culture Wang Meng who was visiting from Beijing. He was at that stage on the outer, as he had publicly refused to congratulate the troops after Tiananmen. He still had plenty of guanxi though, apparently. After all, he had been able to come to Sydney. I was interested because I had read some of his stories (in English of course) and they were rather good. M was not so interested and didn’t go, saying he simply didn’t trust anyone in a high position.

See also Australia China Connections.

Update

* Helen Liu sure gets around.

Kind of relevant… See Strange Maps: 368 – The World As Seen From Chang’an Street.