OVER the past year Australia has been gripped by a tale of suspicion, subversion and spooks. In the latest chapter Sam Dastyari, a Labor Party politician of Iranian extraction, resigned from parliament on December 12th. A recording had emerged of him urging Australia to “respect” China’s territorial claims in the South China Sea, contradicting the policy of both the government and his own party, and confirming earlier allegations against him. He also tried to stop his party’s foreign-affairs spokesperson meeting a pro-democracy activist in Hong Kong. A year earlier he had been forced to leave his opposition post, after revelations that he had taken money from Huang Xiangmo, a Chinese businessman with apparent links to the Chinese Communist Party, at the same time as he supported China’s territorial claims.

Widespread evidence of Chinese meddling in politics and universities prompted an Australian spy chief to warn that his country was facing “an unprecedented scale” of foreign interference. The country’s prime minister, Malcolm Turnbull, is clearly worried. Further revelations showed that two Chinese companies, one run by Mr Huang, had (legally) donated A$6.7m ($5m) over a decade to Australia’s two main political parties. On December 5th the government announced legislation banning political donations from non-citizens and requiring political lobbyists to reveal if they are working for foreigners.

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Australia is not alone. In September the Financial Times reported that a New Zealand MP had taught at a Chinese spy college for years but had left that information off his CV when he later applied for citizenship. That prompted growing calls for more scrutiny of China’s influence over the Chinese diaspora in New Zealand. Canada’s intelligence services have long been worried about infiltration: in 2010 they warned that several provincial cabinet ministers and government employees were “agents of influence”.

China seems to have been busy in Europe, too. Germany’s spy agency this week accused it of using social media to contact 10,000 German citizens, including lawmakers and civil servants, in the hope of “gleaning information and recruiting sources”. There have been reports of Chinese agents trying to groom up-and-coming politicians from Britain, especially those with business links to the country. And on December 13th America started to learn of possible intervention, when the Congressional Executive Commission on China began hearings to look into Chinese attempts to win political sway.

Piercing, not soft

China’s approach could be called “sharp power”. It stops well short of the hard power, wielded through military force or economic muscle; but it is distinct from the soft attraction of culture and values, and more malign. Sharp power is a term coined by the National Endowment for Democracy (NED), a foundation and think-tank in Washington, DC, funded mainly by Congress. It works by manipulation and pressure. Anne-Marie Brady of the University of Canterbury in New Zealand refers to China’s intrusions as a “new global battle” to “guide, buy or coerce political influence”.

The result is different from the cold war—less dangerous, but harder to deal with. Whereas the Soviet Union and the West were sworn enemies, China is a keenly courted trading partner that is investing huge sums beyond its borders (see chart 1). This naturally gives it influence, which it is using to shape debate abroad in areas where it wants to muzzle criticism, such as its political system, human-rights abuses and expansive territorial claims. It especially wants to stifle discussion of the Dalai Lama, Falun Gong, an outlawed spiritual movement, and the Tiananmen Square protests of 1989.

China is hardly alone in trying to shape how the world sees it. And its sharp power, though growing rapidly, is not its first attempt at the game. Over the years China has often tried to silence criticism of its politics by denying visas to critical journalists and academics and by giving a cold-shoulder to unsympathetic governments and firms. It has also attempted to monitor and control ethnic Chinese living outside the country, using Chinese-language media and China-backed community groups.

China has long used soft power, too. Roughly 500 government-funded and government-staffed Confucius Institutes operate in universities and 1,000 “Confucius classrooms” in schools around the world, mostly in rich countries. The institutes do a good job of teaching Chinese to foreigners but they would be unlikely to convince students in the West that China’s authoritarianism is admirable, even if they tried.

Sharp power wraps all that up in something altogether more sinister. It seeks to penetrate and subvert politics, media and academia, surreptitiously promoting a positive image of the country, and misrepresenting and distorting information to suppress dissent and debate. China’s sharp power has three striking characteristics—it is pervasive, it breeds self-censorship and it is hard to nail down proof that it is the work of the Chinese state.

Sharp elbows

Start with its pervasiveness. Most governments and intelligence agencies ignored China’s manipulations because they believed that state surveillance and intervention were mainly directed at the country’s diaspora. They were mistaken. The target now seems to include the wider society.

Confucius Institutes have turned sharper. Many cash-strapped universities have replaced their own language courses with curriculums led by the institutes. In some places the institutes have set up entirely new China-studies programmes. Though most do not actively push the party line, they often restrain debate about China by steering discussion away from sensitive subjects.

Occasionally China’s motives are more obvious. State-backed organisations such as the Chinese Students and Scholars Association (CSSA), often funded by Chinese embassies, have become more assertive. The CSSA offers assistance to the growing number of Chinese students on foreign campuses (see chart 2). It helps them settle in by, for example, organising social events. It also keeps an eye on students and sometimes reports to the authorities back home on people who take part in activities seen as hostile to the party (an Australian academic says that for this reason, many Chinese students ask to be put in tutorial groups without other Chinese).

Disquiet at China’s presumed interference is spreading around Western democracies. It is now growing in America, where Chinese influence to date has been mostly under the radar. Nevertheless, James Clapper, director of national intelligence until January 2017, warned after stepping down of a danger of complacency, saying that China’s growing influence threatened to undermine the “very fundamental underpinnings” of the political systems of America and Australia.

Some political leaders, academics and think-tanks are starting to push back. At the hearing on Capitol Hill this week, Senator Marco Rubio, co-chair of the Congressional Executive Commission on China, expressed frustration that policymakers and business leaders seem “asleep” while China mounts “insidious” attacks on academic independence and free expression, and co-opts American firms or universities dazzled by the size of the Chinese market.

The hearing discussed elaborate efforts to control Chinese students in America. Sophie Richardson of Human Rights Watch, an NGO, described Chinese police visiting the parents of a student who two days earlier had raised “touchy subjects” in a closed-door college seminar in America. Mr Rubio noted government attempts to curb enrolment by Chinese students at the University of California in San Diego, after a speech by the Dalai Lama there. Meanwhile, Chinese attempts to co-opt public officials and academics, even at state and local level, continue apace. Chinese operations are “an extraordinarily important geopolitical issue,” said Mr Rubio.

The immediate aim of Chinese sharp power is often self-censorship. Sometimes that takes pressure. In August the Chinese government asked a number of academic publishers to censor their databases of academic articles to exclude sensitive subjects such as the Tiananmen Square protests and unrest among ethnic Uighurs in Xinjiang. Springer and Cambridge University Press complied but, following furious criticism in the West, CUP reinstated the items.

In November, at short notice, an Australian publisher withdrew a book, “Silent Invasion”, citing possible defamation suits from “Beijing’s agents of influence”. For those already anxious about rising Chinese intervention, the news appeared to confirm their worst fears—and substantiate the academic’s argument, summed up in the volume’s subtitle, “How China is turning Australia into a Puppet State”.

It is not only publishers that are feeling China’s coercive powers. A French film festival this summer decided not to screen a Chinese feature that painted a dreary and bleak image of contemporary China. It cited “official pressures” from the Chinese authorities as the reason.

Chinese ownership of firms abroad may also be a threat. Last year 16 members of America’s Congress requested a government review of foreign activity in certain strategic industries: they cited particular unease about Dalian Wanda, a Chinese property firm that owns a Hollywood studio as well as two cinema chains in America, because of “growing concerns about China’s efforts to censor topics and exert propaganda controls on American media”.

The long arm of the state

Other Chinese state-backed organisations have been trying to strengthen their partnerships with Western think-tanks and universities, partly in order to limit criticism of China and its policies. Many such institutions in the West thirst for cash; taking it from Chinese institutions (all of them in China have party links) has become an “almost normalised” practice, says Peter Mattis of Jamestown, a think-tank in Washington, DC. In Australia Mr Huang, the Chinese businessman who had donated money to political parties, also gave almost A$2m to help launch the Australia-China Relations Institute, a think-tank in Sydney. He has since resigned from its board.

Even without direct pressure from Chinese officials, bosses on Western campuses sometimes worry about future funding if scholars offend the Communist Party. Favours for donated money may be called in at a later stage. Academics report being asked not to invite particular speakers to conferences, for example.

Influence is obvious elsewhere, too. Chinese state media have expanded abroad, presenting a rosy, party-sanctioned view of China. In 2015 an investigation by Reuters, a news agency, revealed that a subsidiary of the Chinese government, China Radio International, was also covertly backing at least 33 radio stations in 14 countries, including Australia and America. These formed a global network broadcasting positive news about China—mostly in English and Chinese, but also in Italian, Thai and Turkish. Their government ties were hidden by front companies.

Usually, such investigations fail to pin down who is responsible—another feature of sharp power. On four occasions since May, students (mostly Chinese) rounded on Australian professors for hurting the feelings of the Chinese people (a popular Communist Party complaint). A lecturer was said to be picking on the Chinese when he wrote a notice in Chinese as well as English telling students not to cheat. A professor used a map that showed India’s interpretation of a disputed Himalayan border with China. Another referred to Taiwan as an independent country. And a fourth used a Chinese saying in an exam that Chinese officials tell the truth only when “drunk or careless”.

Surprisingly, each incident was followed by a storm of social-media commentary and newspaper articles criticising the academics. In one case the Chinese consulate complained. Two of the universities kowtowed: one professor apologised on national television and another was suspended; a third lecturer wrote a lengthy apology. Perhaps, not untypically for Chinese students abroad, they were acting out of a genuine feeling of affronted patriotism. Whether prompted or not, such responses act to dissuade others from voicing criticism in the future.

Even the case of Mr Dastyari is hard to prove. It certainly looks bad. He was labelled an “agent of influence” by a former Australian intelligence officer. His support for China in the South China Sea reportedly followed a warning from Mr Huang that he would withdraw funding to Mr Dastyari’s Labor Party because it backed Australian naval activity in the disputed waters. And, in a meeting after he stepped down from the opposition front-bench, Mr Dastyari seemed to want to protect Mr Huang from Australia’s counter-intelligence service, by warning him that his phone might be tapped.

Yet no crime has been alleged. Mr Dastyari denies any wrongdoing and insists that nothing influenced his remarks on China’s activities in the South China Sea other than “the national interest”. The most commonly cited evidence that he was working for the Chinese is Mr Huang’s links with the Communist Party. In fact, until November Mr Huang led the Australian branch of a party-affiliated organisation, the China Council for the Promotion of Peaceful National Reunification. That is fishy, but not proof of party ties or that he has received direction from the party.

A winning formula?

Will China’s sharp power prove a success? One of its aims is to prevent foreign-based Chinese from undermining the party at home. Under Xi Jinping’s autocratic leadership, the political environment has changed dramatically. For the first time since Mao Zedong’s era, it has a highly visible strongman in charge. He has crushed rivals and sown fear among officials high and low with a ruthless campaign against corruption. Human rights are trampled upon. China wants to be sure that the programme of control at home is not vulnerable to the lack of control abroad.

Its other aim is harder to accomplish. As a rising power, China naturally wants to make the world more congenial to its interests. Here, too, Mr Xi stands out from his predecessors. Gone is Deng Xiaoping’s edict that China should keep a low profile in global affairs by “hiding brightness [and] nourishing obscurity”. Mr Xi has called on China to “turn up” its voice on the world stage. He has built military infrastructure on disputed artificial islands in the South China Sea, sent naval vessels on exercises with Russia as far afield as the Mediterranean and the Baltic Sea, and, in August, opened the country’s first military base overseas, in Djibouti.

As a counterpart to this hard power, China seems to want to market itself as a responsible global citizen. But sharp power is a difficult weapon to yield. It mutes criticism and may make opinions more favourable (see chart 3). But, in Australia at least, the growing approval of China may now have turned the other way as a backlash starts to take hold. Posters were recently put up at several universities threatening Chinese citizens with deportation; “Kill Chinese” was daubed in a toilet at the University of Sydney, with a swastika underneath the graffiti; Chinese teenagers were beaten up at a bus stop in Canberra.

China’s sharp power poses a conundrum to Western policymakers. One danger is that policies designed to smooth over relations whip up anti-Chinese hysteria instead. Suspicions of China could run wild. Barriers to academic, economic and cultural co-operation with China could go up. Rather than learning to live with each other, China and the West might drift into sullen miscomprehension. The other concern is that policymakers play down the risks. If so, the public and politicians in the West may underestimate the threat from China’s rise. How do you strike the balance between self-protection and engagement? Just now, nobody is quite sure.