There is no longer a single economic super-power. The global economy has gone bipolar.â€™
These are the final sentences of Peter Costelloâ€™s recent op-ed piece for The Aged. Itâ€™s a succinct announcement to Australians: we are now living in a world where China has not only replaced Japan as the single most potent East Asian nation, but a serious economic competitor to the USâ€™s dominance.Â This is further underlined by China passing the United States in 2007 to become the world’s largest exporter.
The former Treasurer was obviously musing about the implications of a rising China as if he was the Treasurer. As most Australian investors know, the Chinese government-owned, Chinalco, is bidding for a greater share in debt-laden resources giant Rio Tinto that will require Wayne Swan to make a decision under Australiaâ€™s foreign investment rules. (Some large foreign investments can be made without government involvement, but very large foreign investments require the approval of the federal government’s Foreign Investment Review Board)
Two other large Chinese state owned investments in Australian mining companies are also underway: Minmetals’ $US1.7 billion rescue bid for OZ Minerals Ltd and Hunan Valin Iron and Steel Group’s $US768 million plan to buy a 16.5 per cent stake in iron ore miner Fortescue Metals Group Ltd. More are expected.
What the former Treasurer failed to mention was the increasing geo-political conundrums a rich expanding Peoplesâ€™ Republic of China poses to Australia.Â The US has kept the peace in the Western Pacific since she incinerated â€“ quite justifiably â€“ Hiroshima and Nagasaki, the capitals of Imperial Japanâ€™s military-industrial complex in 1945.
Since then, the US, auspiced by the UN, sacrificed thousands of their own to bring peace to the Korean Peninsula; she sacrificed American lives in Indochina as well as her own social cohesion;Â she backed anti-communist dictatorships to contain Russia and China; she placed hundreds of thousands of troops and vessels in bases and armadas to pacify Japan and to defendÂ South Korea, the Philippines, Singapore and Taiwan; she even gave succour to the economic miracles that ring the Western Pacific dragging millions out of poverty.
It has not always been pretty, but America ensured a regional equilibrium with more winners than losers.Â
If the US is in decline, even temporarily, then China will elbow itself to become the regionâ€™s new self appointed policeman â€“a role the Middle Kingdom has recently taken up off the coast of Somalia to protect trade from pirates.
If China, as Costello suggests, has arrived as the second centre of global gravity, what should Australiaâ€™s policy setting look like?Â
It seems only Senator Barnaby “Bananaby” Joyce has a plan: oppose Chinese interests that are against Australiaâ€™s interests.Â
Bananaby Joyce has gone out with a minor electronic blitz utterly opposing Chinalcoâ€™s strategic $30 billion toehold, claiming Australiaâ€™s direct national interest are at threat. Financed by a Mexican money bags, the advert is well timed for the last week of the Queensland election.
Already the Senator from St George has persuaded the chamber to hold an inquiry into the FIRB rules pertaining to state owned companies. The committee will report back by 17 June.
Senator Joyce, that sounds like leadership!
If the Liberal National Party does unusually well at this weekendâ€™s Queensland election, a tremendous boost will be given to Joyceâ€™s campaign to place his bum upon the Repsâ€™ green leather.Â (That move itself will test the transition measures of the new LNP constitution.)
For the press gallery, a new round of leadership speculation focusing on the Nationals will be generated.Â And why not Joyce as leader? In January 2008, Joyce has even saved a drowning New Zealander â€“ an act of humanity most Australians would never contemplate.
Chinaâ€™s rising opens new policy fronts for Coalition. Turnbull should be able to both attack the Government and create market differentiation: the defence of Australiaâ€™s economic and strategic interests against Beijing and against a Sino-Australian FTA backed blindly by Simon Crean and Kevin Rudd in favour of our ETS-trade exposed industries.
Turnbull will have to stare down the predictable but false accusations of yellow peril wedge politics.Â Considered populism is, after all, just good politics.
At VEXNEWS, we are not convinced Turnbull has the ticker, given the Coalition led by him canâ€™t even query Simon Creanâ€™s ASEAN FTA which would include Burma as a signatory.
After all, the issues posed by China are not simply economic; they also go to the heart of basic human rights.Â If Australia enters into an FTA with China, who is to say that Chinese goods, no longer subject to any tariffs or quotas, will not (continue to) be made with labour sourced from political prisoners and/or abject conditions.
Opposition to the China FTA is an issue that should unite pragmatic conservatives, unionists and the latte left.Â Strange bedfellows yes, but such an alliance would leave Rudd with little room to move.