In an era of intensifying strategic competition, Australia’s national security is no longer a matter confined to the corridors of Canberra. It is a whole-of-nation challenge, demanding a coherent, unified strategy that aligns every level of government. Yet, as the federal government attempts to navigate the treacherous currents of the Indo-Pacific, some of Australia’s most powerful states are rowing in the opposite direction.
The Victorian government’s newly formalised Education Working Group with China’s Ministry of Education is the latest, and perhaps most concerning, example of state-level sub-diplomacy that prioritises parochial economic interests over national strategic clarity. Announced during a visit to China led by Victorian Premier Jacinta Allan on Monday, it is an example of Beijing exploiting a systemic Australian vulnerability to drive a wedge into our national cohesion and expose our most sensitive sectors to foreign interference.
The practice of sub-national governments engaging in international activities is not inherently problematic. For decades, sister-city relationships and state-led trade delegations have built valuable economic and cultural ties. However, this benign model belongs to a bygone geopolitical era. In the era of Xi Jinping, the risk has escalated sharply.
When engaging with an authoritarian state that explicitly leverages all instruments of national power for geopolitical gain, the line between influence and malign interference becomes dangerously blurred. As ASPI’s comprehensive report on this subject, Taking the low road, soberly concluded, Beijing now actively uses partnerships with sub-national bodies ‘to voice their support for China’s geopolitical interests in the region’.
We have seen this script play out in Victoria before. The state government’s ill-fated 2018 memorandum of understanding on China’s Belt and Road Initiative was a textbook case of provincial freelancing in foreign policy, creating a glaring fracture in Australia’s national approach to China’s geoeconomic strategy. That the federal government was ultimately forced to use its foreign relations powers to cancel the agreement in 2021 should have clarified the seriousness of this. Instead, the Allan government’s declaration that its ‘top three priorities in China are education, education and education’ signals a dangerous amnesia. It presents a seemingly innocuous agenda that masks the profound national security risks embedded in Australia’s higher education and research sectors.
This is the core of Beijing’s sophisticated strategy: to bypass the hardened security posture of the national government and exploit the softer targets at the state and institutional level. It is exploitation of federalism. While Canberra grapples with China’s aggression, state premiers can be courted with promises of investment, tourism and student revenue. This creates a dynamic where state governments become advocates for Beijing’s interests within our own national debate, weakening Canberra’s negotiating position and undermining a unified foreign policy. As Chinese Foreign Minister Wang Yi has explicitly said, Beijing seeks to promote exchanges ‘at the sub-national level’ to ‘consolidate public support for China-Australia relations.’ It’s a clear articulation of a strategy that works from the ground up to shape the national environment.
Nowhere is this risk more acute than in our universities and TAFEs (government vocational schools), the very institutions at the heart of Victoria’s new agreement. The director-general of the Australian Security Intelligence Organisation, Mike Burgess, has said that espionage and foreign interference are alongside terrorism and politically motivated violence as top security concerns. Last year he said, ‘we see more Australians being targeted for espionage and foreign interference than ever before.’
The university sector is a main battleground. It is a theatre for intellectual property theft targeting critical and emerging technologies, state-sponsored harassment of students and academics, and covert attempts to influence research and curricula.
The establishment of a ‘working group’ with an arm of the Chinese state provides an official, sanctioned channel for precisely this type of interference. It creates a veneer of legitimacy for engagements that require the highest level of scrutiny.
We have already seen the corrosive effect of programs such as the Confucius Institutes, which former senior Chinese Communist Party official Li Changchun described as ‘an important part of China’s overseas propaganda set-up’. These institutes have been linked to censorship of politically sensitive topics and have raised serious questions about academic freedom on Australian campuses.
To deepen engagement with the same state apparatus, under the broad and undefined banner of ‘educational cooperation’ and without publicly acknowledging these risks, is not in the national interest. A recent review of Australia’s Foreign Arrangements Act described the national interest as a vital factor to consider in sub-national agreements with foreign governments.
That Victoria’s arrangement has been signed suggests the federal government is satisfied that the agreement meets the terms of the act, but the absence of any statement that the risks have been taken into account leaves too much uncertainty.
The threat is not abstract. ASIO has disrupted plots involving visiting academics filming in restricted labs and foreign intelligence services using front companies to recruit Australians with access to sensitive information on AUKUS. The theft of intellectual property from Australian businesses and universities is estimated to cost the nation billions annually. The new agreement promises cooperation in ‘advanced skills’ and partnerships across TAFEs and universities, areas ripe for the exploitation and transfer of dual-use technologies that could benefit China’s military-civil fusion strategy.
The federal government has established frameworks, including the University Foreign Interference Taskforce. But when a state government actively pursues partnerships that cut against the grain of national security advice, it signals to Beijing that Australia is a house divided. It suggests that if the front door in Canberra is locked, a side window in Melbourne or another state capital can be jimmied open.
Foreign Affairs Minister Penny Wong has rightly said ‘it is essential to ensure that agreements with foreign countries are consistent with Australia’s national interests.’ The Victorian government’s latest foray into provincial diplomacy fails this test.
By pursuing economic benefits with a strategic competitor in a manner that wilfully ignores the documented risks of foreign interference, it not only endangers the integrity of its own institutions but actively undermines the federal government’s ability to manage our most complex international relationship. A cohesive national strategy cannot be built on a foundation of state-level freelancing. Until our premiers understand that national security is also their business, Australia will continue to be dangerously exposed.