Australia and authoritarian China: in the end, it appears money rules the world

It is five years since Rudd promised to stop Australia becoming a quarry to Asia, yet Labor now urges more Chinese to come here as workers, students, and even rich investors.

I suppose it is the logical move for Labor, a party that now specialises in promising much but doing little. At least such policies will add economic growth and revenue to help perpetuate its claim to economic expertise.

China is indeed the easy way of obtaining wealth. In the end, money, money, money makes the world go around.

But I personally remain amused at our growing reliance upon authoritarian China, a country that offers little vision beyond supporting its own economic interests. Sure China provides economic opportunities for poorer nations (and Australia) as it acquires natural resources, and cheap consumer goods, but few can believe that this authoritarian nation will be good for the world in the longer-term.

China also remains an authoritarian state that can direct resources to wherever the party leadership desires. As Tony Abbott expressed with past concerns about China's dumping practices, Western societies struggle to compete against such an authoritarian monolith. While Australia does little to protect manufacturing, this month the US Department of Commerce announced anti-dumping tariffs of around 31 per cent on crystalline silicon solar panels imported from China.

But leading the belief that China offers us our economic salvation is Labor's Chris Bowen who gloated on May 9, 2012 "the days of John Howard or Pauline Hanson warning of the social upheaval caused by Asian migration seem like an eon ago" with China last year being our largest source of permanent migrants.

On May 25, 2012, Bowen announced that Labor will fast-track migration applications of wealthy businesspeople prepared to invest $5 million or more in Australia to help address skill shortages and create jobs. It was expected that some 7000 such business investment visas would be granted, albeit with a clause that any successful applicant will depend on one's ability to make a significant investment in creating jobs and economic growth.

No doubt that Labor ministers too are anxious to get some of China's wealth. As one article highlights, many of China's rich are eager to leave the country in search of cleaner air, safer food, better education for their children, although some were concerned about government corruption and the safety of their assets. With China having about 150 to 300 billionaires, one survey by the state-run Bank of China found that 60 per cent of those with assets over 10 million yuan ($1.6 million) were either thinking about emigrating or taking steps to do so.

For Labor, and other Western countries, it does not matter how the rich Chinese created their wealth. In the contest of limited policy choices given an ongoing acceptance of recent policy trends, especially in Australia, why not just take the money?

Maybe the mass exodus of China's rich will force China's leaders to make extensive reform.

But don't hold your breath. The Hurin Report has indicated that 90 per cent of the 1,000 richest people are either officials or members of the Chinese Communist Party. And with about 150 state-owned-enterprises effectively owning two-thirds of all fixed assets in China, with their revenues amounting to about half generated of all Chinese firms each year, this state-led approach means that entrepreneurs and other businesspeople need the support or even membership of the Party to get ahead.

Any hope that wealth also helps change a society is also misplaced given that 80 per cent of China's poverty reduction actually took place during the first ten years of reform from 1979 to 1989, long before the Chinese corporate state reasserted its grip on the economy. Dr John Lee, an adjunct associate professor at the Centre for International Security Studies, Sydney University, notes that China is now the least equal society in all of Asia in terms of wealth distribution with the net incomes of over 400 million people stagnating over the past decade while absolute levels of poverty have actually increased over the same period.