Sam Dastyari's Downfall Proves How Terrified Australia is of China

On Wednesday, Senator Sam Dastyari—of Halal Snack Pack fame—quit the Labor front bench over his financial dealings with Chinese businesses. Earlier in the week, it was revealed that Dastyari had asked Top Education Institute, a Chinese company with links to the Communist Government, to pay his personal debts—including a $40,000 legal fee, and a $1,600 travel bill.

Labor is resolute that Dastyari didn't break any rules, per se, but they do admit he did something wrong—namely, not just accepting general donations like most politicians do. As an ABC investigation showed, Chinese businesses are by far the largest foreign-linked donors to both major Australian parties. Between 2013 and 2015, the Labor Party received $3.99 million, while the Liberals got $2.02 million.

In the face of the Dastyari scandal, there have since been renewed calls to ban all foreign donations to Australian politicians. But just how sinister and concerning foreign political donations? As in, what tangible threat do they pose?

Professor Richard Rigby is a former Consul-General in Shanghai and current director of the Australian National University China Institute. He concedes that "it's easy to come up with a list of sinister activity" but insists the overall picture is much more complex, and less threatening than it seems.

He argues that the real issue is whether or not donations actually buy political influence. "It's hard to argue they get value for money," Rigby says, highlighting that both Labor and Liberals remain opposed to Chinese expansion in the South China Sea, the political issue which China has the greatest stake in shifting.

In the case of the Dastyari affair, there's been speculation that Chinese money may have bought the senator's support on this issue. "The South China Sea is China's own affair," he was quoted as saying in a Chinese media report. "Australia should remain neutral and respect China on this matter." While there's been nothing to substantiate this, the optics of Dastyari taking a position that is pro-China, and at odds with both of Australia's major parties, are bad enough even being one of Labor's rising stars wasn't enough to save him.

Professor Rigby says China's approach of buying favour, while successful in developing countries, hasn't found developed nations like the US and Australia so open for business. "Australia's strong cultural and historical institutions seem to protect us from this type of influence," he argues.

The greatest area of influence would appear to be within the Australian-Chinese community. "Thirty or 40 years ago, Australian-based Chinese language media covered a broad mix of perspectives, including pro-Taiwan, Hong Kong, and independent voices," he said. "That's largely been taken over, and moved much more to reflecting PRC views."

This trend explains the undercover activity at leading Australian universities—where officials were discovered spying on Chinese students studying here—just in case democracy proves to be contagious. Foreign students are regarded as "an intelligent young group who need to be kept onside." But there's also an undeniable aversion to the creep of Chinese influence in Australia, both political and cultural, seen in media reports about everything from Chinese hackers maybe (probably) hacking into our most sensitive computer systems to Chinese ownership of Australian farms.

Digging into the actual numbers though reveals reports of Chinese investment in Australia may be overblown. The federal farm register, recently released by the Australian Tax Office (ATO), shows that the top foreign investors in Australian farmland are actually from the United Kingdom. Of the 52 million or so hectares of land that's foreign-owned, the UK accounts for 53 percent of that. China, on the other hand, only owns 0.5 percent—far below the US, Netherlands, and Singapore.

Contrast that with reports that "Chinese investment is flooding Australia's dairy industry," and that China on an "Australian farm buying spree," and it's easy to understand why there's some concern. Enough concern, apparently, for popular petitions calling for an end to all foreign investment in Australian land.

Professor Rigby says the fear around China makes sense, although it may not be warranted. "While the Chinese country and people are fantastic, it all looks a lot less appealing when wrapped up and stamped with 'People's Republic of China,'" he explains. "Thousands of people risk their lives every year to reach countries like America. When that starts happening with China, we'll know they're getting somewhere—so far that's not happening, and I'm not holding my breath."

Yet in the wake of Senator Dastyari's downfall, and the growing anti-Chinese sentiment in Australian politics, Professor Rigby says it would be wise to remember the massive boost Chinese interest has given the Australian economy since the early 2000s. "There's been a massive increase in trade in the last 15 years [$10 billion to $100 billion 2001-1012, now up around the $140-50 billion mark] with the best Terms of Trade we've ever had," he explains. "The questionable aspects have to be balanced against the huge benefits."