China’s economic model: the antithesis of free trade

Western societies have a choice. They can simply pursue more of the same policy trends and allow the growing influence of China to continue with all of its political and economic repercussions, or they can do something about it (notwithstanding our own problems with unsustainable levels of public and/or private debt).   

Even Australia, perhaps benefiting most from China, has to ask whether it is prepared to further reduce the diversity of its economy by relying even more on an authoritarian and mercantile nation, which barely improved its corruption perception score from 3.1 to 3.5 (10 being perfect) between 2000 and 2010, according to Transparency International.  

We know that China’s rise can have an enormous impact on other nations in terms of their development. A 2011 Asia Competitiveness Institute report indicates that Indonesia had been on a path of rapid industrialisation in the 1980s and early 1990s, yet the export share of goods such as textiles and footwear declined from 58.3 to 40.5 percent between 2000 and 2010 after being 4 percent in 1980. This was because non-oil primary exports such as copper, timber and coffee almost doubled from 15.8 percent in 2000 to 29.1 percent in 2010 as Indonesia focused on exporting the raw materials China needed.

In my opinion, it is a mistake to imply that all is okay, just because Australia now receives record prices for its commodities. Quite simply, the evidence suggests that Western nations cannot allow mercantile China to maintain its various protectionist measures forever as the authoritarian nation does what it takes to sustain and/or expand its economic and political might around the world.