Be wary of the rise and rise of China

I remain a supporter of liberalism, but anyone who thinks such a concept can work, while a communist nation is benefitting most at the West’s expense, is dreaming.

Australia can kid itself that everything will be OK as a consequence of the rise of China, or that Australia will somehow remain prosperous by exporting more minerals or agricultural products to Asia, or benefiting from the arrival of Asian students and tourists.

How long do Western policy-makers believe they can avoid really tough decisions about China? While Michael Costa (an ex-NSW politician) is right to indicate that “Australia as a trading nation has no other option than to champion free trade globally” (Costa, The Australian, June 19, 2009), China’s rise has important political ramifications that can’t be ignored by any simplistic assumption that a communist nation is crucial to the Australian interest.

And for how long will Australians tolerate much greater influence by Chinese who may have acquired their wealth within China’s dodgy political system? With Australia’s Foreign Investment Review Board, in March 2009, softening rules for foreigners owning property, non-Australians are no longer limited to buying only half of the apartments in a new development while students are now able to spend more than $300,000 on a property. Chinese buyers have recently bought a number of luxury properties in Sydney and new condominium developments (“Australian Property Market Boost Thanks To Chinese Wealth”, August 26, 2009).

With home buyers in Melbourne complaining of being frozen out of a tight housing market by Chinese purchasers who have no intention of living in their new properties, Liberal Party officials have noted concerns about Chinese investment in Australian industries during the process for preselecting candidates for the next federal election, particularly in Victoria.

The rise of China should be a major political issue in Australia. A report commissioned by the Electrical Trades Union (ETU) from the conservative consultancy CPI Strategic rightfully highlights China’s lack of labour rights and little enforcement of regulations in relation to child labour, occupational health and safety and even environmental protection. No wonder the ETU’s Victorian branch is campaigning against Australia signing a free trade agreement with China on the basis that it will destroy thousands of Australian manufacturing industry jobs, a stance supported by three lower house independents (Bob Katter, Tony Windsor and Rob Oakeshott) who want much greater debate about such a deal (Malcolm Colless, The Australian, September 22, 2009).

And where is Australia’s academic concern about a rising China? No doubt greater Chinese influence will be less beneficial to Australia’s national interest when compared to the US alliance (despite the West’s many imperfections). So what sane Western academic would support China’s type of diplomacy - as illustrated by a recent $US2 billion deal with Mozambique which will involve 10,000 Chinese “settlers” on its land in return for $US3 million in military aid from Beijing.

Though Martin Jacques suggests that China’s economic rise may provide a model “to be understood and emulated”, he points to the primary purpose of China promoting the “unity of Chinese civilisation” through its language, customs and even race as 92 per cent of Chinese view themselves as Han Chinese (Guardian, June 23, 2009).

So where are you Professors Robert Manne, Ann Capling and Linda Weiss given your almost hateful attack on Howard’s efforts to forge a closer relationship with the US.

Even some poor African nations are now questioning China’s generosity given the stance by Chinese state companies to keep local hiring to a minimum, a policy which had led to domestic resentment. During September 2009, Libya vetoed a bid by China National Petroleum Corp for Libya-focused Verenex Energy. Further, Angola blocked the sale of Marathon Oil’s 20 per cent oilfield stake to CNOOC and China PetroChemical Corp (Sinopec), although only when signing a tentative agreement with the IMF (Benoit Faucon and Spencer Swartz, The Wall Street Journal, September 30, 2009).

Dream on if one thinks that Western nations can compete with communist China. Just recently Japan expressed concern about Beijing’s stranglehold on global supplies of the lanthanide metals used in hundreds of environmental and military technologies which are also vital to the mechanisms of hybrid cars, wind turbines, iPods, lasers, super-efficient light bulbs and radar systems. With a recent White Paper produced by the Chinese Ministry of Industry and Information Technology proposing an export ban on such rare earth metals, Japan may take China to the WTO as the latter now has 95 per cent of global lanthanide stocks (Leo Lewis, The Times, August 28, 2009).

And with some viewing renewable energy as a new growth industry, it is hardly fair when China openly floods the world market with solar cells and panels. Shi Zhengrong, chief executive and founder of Suntech Power Holdings, recently told the New York Times that Suntech was selling solar panels on the US market for less than the cost of materials in order to build market share.