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

By Chris Lewis - posted Tuesday, 29 May 2012


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.

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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?

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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.

With almost all of China's richest people making their money in state-dominated sectors, such as property and construction, resources, other heavy industries and telecommunications, it is no wonder that there are 85 million card-carrying CCP members with another 80 to 100 million on the waiting list to join.

So good on you Labor, the supposed political party most concerned with helping the vulnerable. Our growing reliance on China and hope that it keeps prospering to buy our minerals comes despite the 2012 Amnesty International Report (pp. 106-111) providing many examples of China's desire to control everything during 2011. This includes the CCP using its growing financial and political clout to pressure other countries to forcibly return increasing numbers of Chinese nationals of certain backgrounds,.

Yep, let us support China as much as possible and learn innovation from their supposed wise rich. From what I have observed, there are many articles that imply that China is not that innovative. Take Xu Xiaoping, one of China's most prominent investors, when asked how best to boost innovation, noted that China's unwillingness to promote creativity and free thinking in the same way as other countries means that innovations will continue to come from people who are exposed to other countries and cultures.

Yep, Labor never really had a clue from day one beyond spinning rhetoric about what it would do in terms of economic purpose, besides hoping that the ideals of free trade play out and Australia stays relatively rich from the export of its natural resources. Sorry unions, you can expect a lot more foreigners coming to Australia as our governments crave revenue and wealth creation from the mining sector.

The shortcomings of recent policy trends roll on, and it will take a much smarter political party than Labor to adopt a more appropriate policy mix in the future, unless of course we are all happy being a quarry for the world. Here's hoping we are not.

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About the Author

Chris Lewis, who completed a First Class Honours degree and PhD (Commonwealth scholarship) at Monash University, has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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