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November 22, 2025 15 mins

A sleek Chinese-made ute is suddenly one of the most popular vehicles on Australian roads. It’s cheap, fast and packed with tech. But behind its rise are questions security agencies are struggling to grapple with.

Because the cars we drive today are no longer just cars; they’re also data collection tools. And in a tense geopolitical climate – the lines between convenience and surveillance are blurring.

Today, senior fellow at the Lowy Institute and contributor to Australian Foreign Affairs, Richard McGregor on the BYD Shark, China’s quietly tightening technological grip on Australian infrastructure and what it means for national security.

 

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Guest: Guest: Senior fellow at the Lowy Institute and contributor to Australian Foreign Affairs, Richard McGregor

Photo: AAP Image/Steve Markham

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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
I'm Daniel James, and you're listening to seven AM. A
sleek Chinese made ute is suddenly one of the most
popular vehicles on Australian roads. It's cheap, fast and packed
with tech. But behind its rise, our questioned security agencies

(00:22):
are struggling to grapple with because the cars we drive
today are no longer just cars. They're also data collection tools,
and in a tense geopolitical climate, the lines between convenience
and surveillance are blurring today. Senior follow at the Loewey
Institute and contributed to Australian Foreign Affairs Richard McGregor on

(00:44):
the BYD Shark, China's quietly tightening technological grip on Australian
infrastructure and what it means for national security. It's Sunday,
November twenty three. This episode was originally published in June.

(01:06):
Sir Richard, I wanted to start with BYD. These cars
are everywhere on Australian roads right now. What can you
tell me about them and how they became so popular here?

Speaker 2 (01:15):
Well. BYD is actually quite an old company by Chinese standards,
at least twenty years old. It was originally a battery company,
you know, a Chinese entrepreneur and Shenzen set it up
more than a decade ago. Warren Buffett invested in BYD,
but it really didn't, you know, start to develop rapidly
as a company and as a global company and as

(01:37):
a global car company until about three four years ago
when their models went well. I guess they started making
better cars. When Chinese EV manufacturing generally started to develop
rapidly and in fact become much better, much cheaper, even
in some respects more technologically advanced than Western models, and

(01:59):
it just became a bermouth. And Paul, we're sitting inside
the bod Shark today. We're going to redo some of
the tests and Bad's most popular car in Australia is
a year called the Shark six. Is it faster, yes
it is. Has it got more tech in it? Yes
it does. Is it cheaper also yes?

Speaker 3 (02:22):
So it's winning it But moment isn't it.

Speaker 2 (02:26):
It's a hybrid, not an EV. But it's past all
of the most stringent sort of off road tests that
Ossie's tow up for their utes, even more so than Toyota.
One of the things I wanted to do was really
push the limit of the Shark to do that, you've
got to go and cross the Simpson Desert.

Speaker 1 (02:45):
I reckon.

Speaker 2 (02:45):
It became massively popular very quickly in Australia this year,
and I think became one of the largest selling cars
in the country in a matter of months.

Speaker 1 (02:57):
So for a lot of people, these cars are appealing
because they're relatively affordable electrical hybrid vehicles. That's not necessarily
how Canberra sees it. How are they looking at this
situation as it's unfolding.

Speaker 2 (03:09):
Yeah, I guess the first thing the slight qualification. They're
not just affordable, they're good. You know, Chinese tech used
to be cheap but not necessarily good. Now Chinese tech
is cheap or competitively priced, but also often the best.
So that's a totally new ballgame. I guess that's why
Canberra is looking at it with such anxiety. And I

(03:31):
guess the key issue here is that everything these days
is effectively bundles of software controlled by the host country
or companies in the host country and updated by them
and having access to them. Now, according to Chinese law,
any Chinese company, private, public, or otherwise must give complete

(03:55):
access to that country security services if asked. You know,
there's no system of warrants or judicial review or you know,
judges looking at it or anything like that. It's just
one and part of the entire system. So countries like Australia,
which don't have a trusted relationship with China, are we

(04:15):
happy with having large parts of the data generated by
our economy are potentially open to the Chinese government and
Chinese security services.

Speaker 1 (04:27):
So what are the concerns that the national security agencies have?
I mean, what kind of scenarios are they imagining that
can happen with China having access to all of this data.

Speaker 2 (04:38):
Yeah, it sounds kind of conspiratorial and crazy, but I
think it's pretty straightforward. Let's take the example of cars again,
you know cars, electric cars and the like, you know,
which in turn are going to become sort of driverless cars.
They're always training themselves on the surrounds. In other words,
they're little data collecting machines. So they're filming where they're going,

(05:00):
they're processing that data. Often they're filming where they're going
and filming faces on the street, for example, and you
collecting information about citizens. Now, in some respects that's quite normal.
You know, evs in America do that as well. That
they're all training themselves to be better cars, as it were.
But do we worry about an American car like we

(05:23):
would like a Chinese car. There are some people on
Australia who couldn't care less. There are others who would
be deeply concerned. I think today it's basically common sense
that China would be collecting data and using data, just
as by the way Facebook does, you know, Instagram does,
et cetera, et cetera. Everybody's collecting data and we as

(05:45):
a country have to think about how that's collected, who's
collecting it, and how it's used. And at the moment
that's dominated by Chinese companies in Australia.

Speaker 1 (05:53):
Is there any way that we can store the day
that those cars collect on shore in Australia.

Speaker 2 (05:59):
Well, that's one of the debates onshore storage. For example.
You know Donald Trump has tried to find ways for
TikTok to remain available in the US. Was actually banned
by a law passed by Congress. Trump he keeps putting
off that ban, And the particular proposal in the United
States was to get companies owned by Oracle, the software company,

(06:23):
to store TikTok data onshore in the US, so it
couldn't potentially be accessed by the parent company in China
and by extension, the Chinese authorities. So yes, that is
one possible thing that we could do. There are others
who say that's not enough, for it's not fool proof,
because there are other ways of accessing the data and

(06:45):
we might struggle to monitor that. But to give you
another example about the US, for example, the Biden administration
brought in new rules which banned connected cars in other
words evs collecting data from untrusted entity in other words,
China from the United States, a rule that comes into
force in twenty twenty seven. Would we do that? You know,

(07:08):
it would be very hard to do that in Australia.
In the US, there aren't many Chinese evs in Australia.
We don't tariff cars anymore. We gave up our car
industry a bit over a decade ago. So you know,
the influx of Chinese cars has been great for Australian consumers.
And it's the government really going to force consumers to

(07:29):
pay more or force those cars out. That's very difficult
to see. It's a very costly decision, costly economically of course,
but costly diplomatically as well with China.

Speaker 1 (07:39):
And a great technical challenge too.

Speaker 2 (07:41):
I would imagine it's a technical challenge particularly from middle
sized economy like Australia, which doesn't have the resources of
China or the United States.

Speaker 1 (07:52):
After the break the diplomatic impact of banning Chinese technology, Richard,
we're talking about Canberra's security concerns around Chinese technology and

(08:12):
the Chinese government's access to our data. So has our
government ever acted on these concerns.

Speaker 2 (08:18):
To give you a context here, let me take you
back to twenty eighteen when the then government of Prime
Minister Malcolm Turnbull effectively banned the Chinese Telecommunications Company by
Way from bidding to be the sort of chief contractor
for Australia's five G TELCA network.

Speaker 4 (08:37):
The decision we took was really one based on hedging
against future risks. I mean, the reality is the nature
of the five G network is that you cannot any
longer reasonably distinguish between the core and the radio access network.

Speaker 2 (08:51):
And this was basically because the government decided that they
couldn't be sure that effectively Australia would maintain control and
access to the network. You know, should there be a
conflict of any kind, should relations with China plummet dramatically.

Speaker 4 (09:08):
Intent can change in a heartbeat, So you've got to
hedge and take into how the risk that intent can
change in the years ahead. Remember a threat as a
combination of capability and intent, So in areas of national
security where naturally cautious, prudent and hedging.

Speaker 2 (09:27):
And that was a big decision at the time. It
was one of the tipping points in the change in
attitude of Beijing to Australia and which resulted in China
taking punitive trade measures against Australia in twenty twenty you know,
banning wine, bali, lobsters, coal, et cetera, et cetera.

Speaker 3 (09:48):
And relations between China and Australia appear to be further deteriorating.

Speaker 2 (09:52):
China's China has banned bali imports from Australia's largest exporter CBH,
claiming the product had harmful we in its grain.

Speaker 3 (10:02):
If this is confirmed by the government, the move would
further inflame tensions between the two countries which appear to
be heading towards a trade hall.

Speaker 2 (10:10):
But if you go fast forward now twenty twenty five,
in retrospect, the Hiawai decision looks very easy because it
was cost free, effectively cost free in this respect, we
didn't have to rip anything out of our telecommunications network.
We just bought a different system from Rickson. But now,
if you look at the Australian consumer and industrial economy

(10:31):
and the evs or hybrid vehicles are part of this,
it's dominated by China. Evs. Eighty percent or so of
evs and Australia are made in China, including Teslas, by
the way, which are made in the Tesla factory in Shanghai.
The same goes for solar panels, are same goes for
wind farms. So the five G decision was easy in retrospect.

(10:56):
But imagine the impact of a decision now of Tradian
government to somehow regulate Chinese electric vehicles and hybrid vehicles.

Speaker 1 (11:06):
And as consumers, Richard, do you think people should be
worried about their data being gathered by byd and other
Chinese companies and given to the Chinese government.

Speaker 2 (11:14):
Look, I don't think individual Australians necessarily have to worry.
You know, your data or my data is not particularly
meaningful to the Chinese. But we do have a duty
and obligation to protect parts of the Australian economy, individuals
in Australia who particularly play a role in the national

(11:36):
security establishment. It's basically about sovereignty one way or another.
You know, are we able as a sovereign nation to
manage our own data and stop it being accessed by
foreign entities that we don't trust and that we're in
conflict with on other issues. So you don't want to
induce sort of, you know, widespread paranoia about every bit

(11:58):
of Chinese technology. You've got to make judgments in particular cases,
and if there is a risk, you have to try
and mitigate that risk.

Speaker 1 (12:06):
Have we ever faced a large skyle sober attack from
another country before?

Speaker 2 (12:11):
We have not, as far as I know, we have
faced You know, a lot of entities in Australia have
suffered cyber intrusions or cyber attacks if you like, but
they're usually by private hackers, people we would call hackers
Russians in the like. It might be Chinese entities as well.
It could be all sorts of people, but not by
a nation state, and that's very different. You know, countries

(12:34):
like Taiwan, for example. I think Taiwan is the country
which suffers the most cyber attacks by a state entity,
obviously China. In that case, you know, Taiwan is quite
an advanced technological economy, but it is pretty helpless in
the face of Chinese attacks and the like. So we're vulnerable.

(12:55):
Everybody is vulnerable. I guess the issue here is the
intent of a nation state in conducting a cyber attack
on Australia. Why would they be doing it? What would
they attack that the sorts of cyber attacks which have
been rehearsed against the United States by the Chinese is
turning off the water supply at different places for example.

(13:18):
You know, you want to stop troops moving in the country,
cut off the water near them, cut off the electricity
in the light. So it's that sort of thing. Now,
I'm not making a moral point here, you know, I
presume that the Americans are rehearsing the same sort of
cyber intusions as the Chinese. It's a matter of you know,

(13:39):
how a country is smaller country like Australia protects itself
against that if it doesn't stop at how it identifies
that attack, and how it shuts it down and then
recovers from it.

Speaker 1 (13:51):
Richard Thank you so much for your time.

Speaker 2 (13:53):
Thank you very much.

Speaker 1 (13:58):
You can read Richard McGregor's article Trope and Horses, How
to Defend against Chinese Technology and the new edition of
Australian Foreign Affairs. It's out today. Thanks for listening. Tomorrow

(14:19):
on the show, I'm bringing you an interview with one
of the very few journalists still reporting from Moscow. Cape Tapuri,
has been tracking how in wartime Russia President Vladimir Putin's
allegiances are shifting. For decades, Putin's governed through a network
of loyal elites, oligarch's bureaucrats, security chiefs, each rewarded for
their obedience and connections. But since the evasion of Ukraine,

(14:43):
the system has begun to fracture. The old elite are
being sidelined and a new caste is emerging. Relatives, idelogus,
battlefield loyalists. You tie their futures to the war. I've
got to say it's a fascinating conversation. I'm Daniel James
is seven, a yen see to murray
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