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China isn't the monolith it's made out to be

By Lao Zi - posted Wednesday, 17 November 2010


Regardless of which faction is in power, it is important to scrutinize business dealings with China carefully and indeed suspiciously, as the Chinese do for most business arrangements.

Australia is right to be wary of Chinese companies purchasing natural resources in Australia. Foreign investment has always been a key component of Australia's development, however in the past, those companies were not enmeshed with foreign governments in the way that the large Chinese companies are.

When Chinalco was attempting to secure a slice of Rio Tinto, they claimed they were independent of the Chinese government, however the no-strings-attached 30bn loan offered by China's Exim bank as a sweetener which followed would seem to detract from this. Point to any large company in China, and you will find the vast majority of board members are members of the CCP. It's necessary for networking and to secure business deals. It also means that the CCP has insights into all the major boardrooms in the country.

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Recent negotiations for mining interests in Australia have also included requests for China to be able to import cheap labour, as Chinese companies do in Africa and around the world.

One can argue that with Australia's low unemployment and skills shortage this is justified, especially given Australia's tendencies toward using temporary migrant workers for a range of unskilled and low-skilled industries such as aspects of Australian agriculture. However it also raises the question as to how these companies - embedded with the Chinese government, as most large Chinese corporations are - would operate in the event that they had majority ownership of, or even significant clout in, Australia's mining sector. Given the recent ousting of a Prime Minister, due in part to ructions over a proposed tax on mining, wouldn't it be fair to say that at the present moment in Australian history, the mining sector remains an influential part of both Australian politics and the economy?

And given that Australia appears to be putting a large number of eggs in the mining basket for the foreseeable future, it seems logical to ensure that foreign state-owned companies whose interests may extend beyond extracting profit, should remain a minority voice. At least until they can show that they are merely companies, not organs of State power.

Australia should remain firm on its beliefs, particularly those regarding human rights. Regardless of whether or not you like or hate the US or like China, neither stance means we should remain silent when we disagree. Not because we wish to change China, but because in remaining firm, we show the Chinese people what we stand for. The Chinese don't respect weakness, and in remaining firm we can show the CCP and its factions that respecting human rights grants strength instead of detracting from it.

This is not mere idealism. The CCP is terrified of social unrest, which is why the phrase a "harmonious society" is so popular there. With more than 70,000 incidences of "social unrest" recorded annually in China in recent years, and with a five-thousand year history of peasant rebellions dethroning emperors, they have every cause to be worried. The CCP has two very difficult jobs: running the country and holding on to power.

They ostensibly run the country for the country's sake. They undoubtedly believe that holding on to power is also what's best for the country, and this may be true - if they are willing to enact reforms that dilute their power… and that may also be necessary for their own survival. The West won't change China, not by actively trying to anyway.

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China however, just might choose to change itself.

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About the Author

Lao Zi is a semi-mythical Chinese philosopher who lived sometime between the 4th and 6th century BC. He's widely regarded as a counterweight to Confucian ideals and his work has been embraced by libertarian and anti-authoritarian movements worldwide. It's also the nom-de-plume of a former Australian journalist, currently residing in China who blogs at chinarealpolitik.com.

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