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‘Faustian bargain’: defence fears over Australian university’s $100m China partnership

world-first collaboration between the University of New South Wales and the Chinese government, celebrated as a $100m innovation partnership, opens a Pandora’s box of strategic and commercial risks for Australia, according to leading analysts.

These include the potential loss of sensitive technology with military capability, an unhealthy reliance on Chinese capital and vulnerability to Beijing’s influence in Australia’s stretched research and technology sector.

The UNSW Torch Innovation precinct, the first outside China, was unveiled last year with Malcolm Turnbull present at the signing ceremony in Beijing’s Great Hall of the People, alongside the Chinese premier, Li Keqiang.

Since 1988 the Torch program has brought businesses together with universities and researchers inside China to create high-tech startups. The Chinese government says it has accounted for 11% of the country’s GDP. This $100m deal included an initial $30m from eight Chinese companies to support Australian research.

Since then 29 Chinese partners and one Indian one – Adani Solar, a subsidiary of the resources giant – have signed on to the UNSW Torch project. They include at least seven firms working in industries with dual use military potential such as aerospace, GPS navigation, underwater cameras and nanotechnology. The research is not funded directly by the Chinese government but by the companies themselves.

One of the companies participating in the scheme is Huawei Technologies, the Chinese firm banned from participating in Australia’s national broadband network in 2013 on security grounds, based on the advice of Asio – the Australian national security agency. Earlier this year, it was reported that Nick Warner, the Australian Secret Intelligence Service’s director general warned the Solomon Islands against using Huawei to connect its under-sea cable.

On its Torch website designed to draw in potential investors, the university highlights research with explicitly military applications such as unmanned military vehicles. 

Richard Suttmeier, an American expert on China’s science policy and emeritus professor at the University of Oregon, raised US concerns that Beijing’s aggressive decades-long technology acquisition drive was allowing China to quietly supersede other countries in certain fields.

On the UNSW cooperation he said: “One can’t help wondering about a Faustian bargain quality to the program. Increasingly China is able to dangle very, very attractive incentives for cooperation. International partners can reap benefits in the short run but may lose out in the longer run if they lack farsighted strategies.”

Clive Hamilton, professor of public ethics at Charles Sturt University, said: “I think the Torch program will make UNSW in effect a client university of the People’s Republic of China in its science and technology areas, and more broadly because PRC and its agencies will have a huge amount of sway over university decision-making.”

Rory Medcalf, the head of the Australian National University’s national security college, has expressed concern that research with potential for military use could bypass existing controls.