Notice: Undefined index: hide_archive_titles in /home/chesterf/public_html/wp-content/themes/modern-business/includes/theme-functions.php on line 233

Category: China

04/01/2022

The Chinese Way

4 January 2022

Everyone want to criticise China as an authoritarian state, but if you stand back and look at how they tackle challenges that we have, there may be lessons to be learned.

There was an interesting show on ABC TV last night hosted by Hamish Macdonald ‘The China Century’, Part 1 of 5. It looked at the Tiananmen Square protests of 1989 and their ruthless repression. But next week it will look at how they have combined capitalism and strong state control.

Competition increase efficiency when it lowers prices, but note in the late stage of ‘laissez faire’ monopolies allow supernormal profits and their political influence puts them above the law. Sometimes the loss of central control may also mean that a fragmented industry cannot produce state of the art products. I read some time ago that the US is having a problem producing good fighter planes because the intellectual property is now spread over a number of competing companies, so no one company can be state of the art on all aspects. A single body controlling the situation would not have this problem.

The other aspect is that the Chinese can write the rules for its industries and not simply assume that whatever makes the most profit in the immediate term is the best place to consume resources.

In Australia, our economy is totally out of whack because the tax concession of negative gearing has meant that everyone has simply invested in real estate as a ‘no brainer’ way of making money. But the rise in prices is in a sense arbitrary. If a house goes up in price from $100k to a million, it is still the same house. The difference is that the person who now buys it has $million debt. The ‘profit’ is someone else’s borrowing. So at a national level, we have the second highest level of private debt in the world (after Switzerland) and just pay interest to foreign banks. We also have no money to invest in our productive export industries, or even think about them as real estate is so easy. We note that developers distort the electoral process and do dodgy deals to get their approvals through, but once it is all done, we wring our hands- nothing can be done. The building stands, and it will all happen again next time.

We watch askance as our regulatory systems fail. The Banking Royal Commission was initiated by a whistle-blower not the regulator, and nothing much has changed; one banker resignation, no one charged. We saw the Aged Care inquiry, the Casino Inquiry were both whistle-blower initiated as well. We are up to 4 inquiries into iCare and nothing changes. We hope that our buildings are OK, as the regulatory system has not been working too well there for about 25 years.

We note that our rich are getting much richer and our poor poorer, but our government does not want to do much about that. Hey if you can’t afford a Rapid Antigen Test, you can always wait and see if get sick. ‘Universal health care’ is a good slogan.

We see our kids getting fatter and more addicted to computer games, but there is not much we can do about that. We are moving to high rise schools as so many were sold off in the 1980s and now there is no space for recreation, and we also saved on sport teachers and made serious exercise optional.

We worry that our electoral system is influenced by fake news, trolls and data analysis companies. We understand that the social media concentrates on putting like people together so they will stay logged in and be available to advertise to. We understand that a shock headline also attracts more interest and controversy, so we are hyper stimulated until we ignore what is important. Advertising always affected media content towards making people more receptive to the ads and purchasing; social media has now put it on steroids.

The Chinese have taken all this on. They have put a super tax on rich people and made statements about everyone having a decent life. They have tried to lessen kids times on computers and to increase their exercise. They have taken on social media, and most recently forced a major developer to demolish high rise building because the building permit was illegally obtained. The developer is a major one, and already in danger of going broke. Can anyone image this happening in Australia or the US?

Many problems in the world are universal, and watching what a truly authoritarian government can do is interesting. We have the contrast of our governments, that seem to want to be as small as possible and not even acknowledge problems, and theirs which seems to testing the limits of power. We may not want to do it ourselves, but if we ever decide to do anything, it will be helpful to have information on the outcome of the range of possible actions.

Here is an article about Evergrande, the Chinese property developer which is going broke and now had to demolish significant assets. It was in the SMH, from Bloomberg.

Next Monday on ABC TV at 8.30pm the second article on China, considering its use of the combination of capitalism and central control.

China’s Evergrande halts trading after ordered to tear down apartments

By Jan Dahinten

January 3, 2022 — 3.29pm

Chinese developer shares tumbled following local media reports that China Evergrande Group has been ordered to tear down apartment blocks in a development in Hainan province. Evergrande halted trading in its shares.

An index of Chinese developer shares slumped 2.8 per cent as of 11.37 a.m. local time, with Sunac China Holdings and Shimao Group Holdings plunging more than 10 per cent. A local government in Hainan told Evergrande to demolish 39 buildings in 10 days because the building permit was illegally obtained, news wire Cailian reported on Saturday.

Evergrande gave no details on the trading suspension other than saying it would make an announcement containing inside information.

The government of Danzhou, a prefecture-level city in the southern Chinese province of Hainan, asked Evergrande to tear down 39 illegal buildings in 10 days, Cailian reported on Sunday, citing a document from the local government.

The report cited the document, which was dated December 30, as saying that the Danzhou government said an illegally obtained permit for the buildings had been revoked so the buildings need to be dismantled.

Evergrande didn’t immediately respond to a request seeking comment and calls to Danzhou authorities went unanswered on a public holiday in China on Monday.

The company on Friday dialed back payment plans on billions of dollars of overdue wealth management products as its liquidity crisis showed little sign of easing.

Property firms have mounting bills to pay in January and shrinking options to raise necessary funds. The industry will need to find at least $US197 billion ($271 billion) to cover maturing bonds, coupons, trust products and deferred wages to millions of migrant workers, according to Bloomberg calculations and analyst estimates.

Beijing has urged builders like China Evergrande Group to meet payrolls by month-end in order to avoid the risk of social unrest.

Contracted sales for 31 listed developers fell 26 per cent in December from a year earlier, according to Citigroup Inc. analysts. Evergrande’s sales dropped 99 per cent, the analysts wrote in a note dated Sunday.

Bloomberg

30/09/2021

Nuclear Submarines- a horrendous folly to win an election?

30/9/21

Many of us despair at the Morrison government; whether it is the callous approach to asylum seekers, Robodebt and welfare generally or the naked favouring of their constituency where JobKeeper payments are not required to be repaid. The total breakdown in ethical standards where public moneys are rorted with grants to electorates that will favour them at the polls and might even be the reason that they were re-elected. The dismantling of public service capabilities and intellectual resources with the granting of private contracts for welfare payments with the Indue card, given to Liberal-friendly companies or to compliant companies to run detention centres or Great Barrier reefs research. The lack of support for TAFE and trade skills, replaced by skilled migrants on visas that have no Medicare or income support when they became stranded, the casualisation of university teaching positions with and no support or quarantine for foreign students despite the fact that education is our 3^rd biggest export industry. It just goes on and on.

The mismanagement of the COVID epidemic in terms of being unwilling to build quarantine facilities to allow overseas citizens to return home and the lack of purchase of vaccines, and their desultory distribution practices is the current big issue that is upsetting their popularity. They were willing to throw money at JobSeeker when it went to big business, but now that it continues and has to go to individuals they want to end welfare and will stop payments as soon as vaccination rates hit 70% of the over 16s, which is only 57% of the population. As I have said on this page before, this is a level of irresponsibility beyond all else, justified by the idea that the economy has to go on and only the aged and sick will die. The divisiveness and callousness of this leaves one breathless, and as it plays out it is likely to be the end of the Morrison government.

So Morrison, the master media manipulator needs a very major distraction. China is asserting itself, which is clearly a problem, but the demonising of it seems very convenient for Morrison. The French submarine contract was not good, but it seems that the nuclear one is worse.

We were going to get 12 conventional submarines at a cost of $90 billion, the first coming in 2034. Now we have dumped the French contract and get nuclear submarines at a cost of either $3.45 billion each for the US Virginia model or $2.83 billion for the UK Astute model (2018 prices). The delivery dates are likely to be around 2040, so our old Collins class ones will be a long way past their use-by date.

The noted defence commentator, Hugh White had a very critical piece in The Saturday Paper 18-24/9/21, teased with ‘The old plan was crazy, the new plan is worse’. Two ex-Prime Ministers, Keating and Turnbull were both highly critical of the decision in the SMH of 22/9/21 and 29/9/21 respectively. Turnbull even spoke at the National Press Club on the subject. www.smh.com.au/world/asia/morrison-is-making-an-enemy-of-china-and-labor-is-helping-him-20210921-p58tek.html

The deal, dubbed AUKUS, was announced by Morrison with US President Joe Biden and UK PM, Boris Johnson. One could hardly believe this was not some sort of parody. The old Anglo alliance, rooted in history, but totally at variance from the image that Australia since Keating had been trying to project, a country engaging with Asia.

Boris Johnson wrote a hagiographic biography of Churchill and fancies himself as a latter day Churchill, which is absurd hubris. The UK has no power ‘East of Suez’ as was demonstrated when 2 British warships sent to defend Singapore in 1941 were promptly sunk by Japanese aircraft. Have they done anything significant here since?

The US is playing a far more strategic hand. Australia has been a lap dog to the Anglosphere for all its history and this changed from the UK to the US in WW2. Even in the absence of reasonable Peace lobby in Australia one might have hoped that the debacle of the Afghanistan war would temper our enthusiasm to go all the way with the USA, but it seems not. The US is preoccupied with China. It wanted a base in Australia. It may be hubris for the US to set up bases to try to contain China, but that is still where their thinking is at present. Why would Australia need submarines to go to China except as part of a US force?

Gillard was the first Prime Minister to allow US troops to be stationed in Darwin, but the US wants a submarine base. Australia may not have been willing to let the US have such a base as it would make us a nuclear target. So the answer was simple. Promise to sell us some nuclear submarines. We would then need a nuclear submarine base and to maintain our subs. Presto, Australia is paying for nuclear submarines and a base that our ally can use. The US will not be able to contain China, which will sadly be demonstrated when China decides to take Taiwan. China wants to be the dominant power in the world, and it seems that the world is going to have to get used to this idea. China is likely to want to dominate economically and technologically, so the invasion of Australia is unlikely to be necessary and we should retain our economic and technical sovereignty, but rely on diplomacy to look after our interests.

The French conventional submarines were as fast underwater as the nuclear ones will be, but have a lower range and lower costs. The French version of these is nuclear, so one of the reasons that they were chosen was that they could be re-engined at any time with nuclear propulsion with a lower-grade uranium, which was not weapons grade. Naturally they had a lesser range, but if the object is to defend Australia, this may not have been a problem. Nuclear submarines can stay underwater indefinitely, but their reactors produce a lot of heat, so if they are still they leave an area of hot water, which either is or will be visible to a satellite. So the idea that they are less vulnerable to attack may not be correct. It is not impossible that in future submarines will be as vulnerable to satellites, missiles and drones as battleships were to aircraft in WW2.

In terms of the perception of Australia oversea there are considerable downsides to the deal.

The Chinese representative said to Stan Grant on China Tonight on ABC TV 20/9/21 that the submarines would make Australia a nuclear target. Grant seemed indignant and said that there were no nuclear weapons- it was just the propulsion. Presumably the Chinese representative was referring to the fact that there would be a US nuclear submarine base on Australian soil, and he assumed that Grant knew that. It appeared that Grant had not thought it through. https://iview.abc.net.au/show/china-tonight/series/0/video/NC2130H008S00

The Indonesians are concerned that we have long-range submarines that we do not really need for our coastal defence and that we are firmly partisan in the US-China standoff and have brought the conflict into their area, quite apart from any aggressive intentions that we might harbour against them. The old colonial ties are all renewed- what sort of country are we, Asian or Anglo?

The French are naturally furious, and they are very influential in the EU while we are on the verge of a free trade treaty. This is very poor politics on a very big trade issue. We have unilaterally torn up a major deal. How reliable are we?

Morrison has been seen in happy snaps with the US and UK leaders. He is appealing to his Anglophile base. He thinks this parody of statesmanship can be spun into an election victory, some say as soon as November, before the COVID debacle reaches its final stage. If Morrison can win again it will be the last straw in taking Australia down a dismal and unconsidered path.

www.smh.com.au/politics/federal/clumsy-deceitful-and-costly-turnbull-slams-handling-of-nuclear-submarine-decision-20210928-p58ve3.html

02/09/2021

Corruption at Many Levels- the ripping off of Meat workers

1 September 2021

An article in the SMH on 31/8/21 said that there was a lot of bribery and corruption in the recruitment of Chinese to work in Australian abattoirs.

Abattoir work is physically hard and unpleasant, so rather than pay Australians more to do it, workers are recruited from overseas, like fruit pickers. The government, perhaps because of political donations is happy to make special 457 visas for this, rather than insist that the jobs go to Australian residents. This is the case for both Liberal and Labor. (Marx said that people were more loyal to their class than to their country, but we won’t mention this now).

So the recruitment process has been corrupted as some foreign people will pay a lot to get into Australia and after working here for 2 years on totally exploited wages they hope to get a residency visa. Recruitment agents may take whatever money they can get, and whatever other little sweeteners. Fake CVs were used to claim that Chinese had good English skills and had worked in abattoirs, which is presumably unlikely as Chinese abattoir workers would not have the money to pay the recruiters. This farce came to light naturally from a whistle-blower who was in on the deal rather than any regulatory agency, the Home Affairs Dept or the Meat Industry National Training Council (MINTRAC). The Union was not mentioned in the story.

Migration agents are a poorly controlled profession at the best of times, with many dodgy operators exploiting desperate people.

Australia should spread its wealth by paying people to do jobs like abattoirs and fruit picking, and if these products are more expensive in consequence, we need encouragement to Buy Australian produce. Of course ‘free trade’ treaties favour cheap imports, but if we are going to have the social harmony that comes from a reasonably equitable society, we have to spread the nation’s wealth. Cheap meat should not just lead to a conga line of corruption and exploitation as a by-product.

20/08/2021

Attitudes to Anti-Vaxxers- a parallel with smokers?

20 August 2021

I spent over 20 years of my life with my principal task to fight the tobacco industry. I saw how harmful smoking was in my patients, and tried to tell them. But smoking was common, allowed everywhere and, after food, the most advertised product in the country. Shops were so covered with ads that when you drove into a town, you looked for the cigarette ads to find the food shop. It was normalised. One of my patients, whose leg I had just amputated said, ‘All the doctors say that smoking is harmful, but if it was the government would do something about it’.

There were almost no smoke-free restaurants anywhere, because the non-smokers had been trained to put up with it, and restaurateurs were worried that smokers might leave them. They knew that the non-smokers had no choice. The tobacco industry told the pub owners that smokers drank more and gambled more, so they had better not offend them, so the Australian Hotels Association were the major lobby, with the Registered Clubs and Restaurant Association tagging along. The tobacco industry disputed the science long after it was proved to any reasonable analysis, and smokers clung onto this. The tobacco industry PR followed what was called the ‘tightrope policy’. They did not know if smoking was harmful because they were not doctors, so they were not responsible for selling a lethal product, but because everyone had heard it was harmful, smokers were taking their own risks.

Smokers therefore said, encouraged by the Industry that it was their ‘right to smoke’, and then they denied that it harmed everyone else. So instead of the tobacco industry having to prove that passive smoking was harmless, the medical profession then had to prove it was harmful and then get legislation implemented, a process that took about another 45 years at about 43 deaths a day in Australia. Since non-smokers also got heart attacks etc, the Industry argued that they could not blame them on the second hand smoke.

Now we have the ‘right not to be vaccinated’ and the ‘right not to be excluded because we are unvaccinated’. Instead of spreading second hand smoke, unvaccinated people are spreading COVID virus. And they are saying that vaccinated people also spread the virus and can also catch it. Perhaps. But vaccinated people spread less virus, and the right not to be exposed to a virus trumps the right to spread it.

China unashamedly goes for the greatest good for the greatest number and puts little store on individual rights. Our tradition of Greek thought is all about the individual reaching his or her full potential, even if this means we tend to overlook the exploitation of others. This is becoming increasingly relevant as unregulated markets, like a Monopoly game, move money upwards and increase inequality.

I saw a meme yesterday that the CDC (Centre for Disease Control) does not mandate masks. This was in the context of the conclusion that ‘neither should we’. No doubt CDC does not need to mandate masks (assuming that the meme was correct)- the people who work there will have the vaccine ASAP.

The answer in civil rights terms if that anti-vaxxers have the right to be unvaccinated as consenting adults in private, but they do not have the right to go into public spaces where they may spread the virus. That is the individual rights answer and also the greatest good for the greatest number. We had a tobacco epidemic for 100 years, when it should have lasted 50 years if there had been science-based policy. This must not happen with this epidemic. We must have a lockdown until probably 90% of the whole population is vaccinated. We should vaccinate people who want it as fast as we can. Then we should have vaccine passports so we can open up again. Florida in the US is showing us what happens when silly policies are followed.

09/07/2021

Threat to Free Speech- when Chinese students pay and have an agenda.

9 July 2021

Here is an article from The Conversation talking of the effect of Chinese resistance to certain views on their history. Teaching is already distorted by the need to pass students who have paid a lot.

https://theconversation.com/cultural-sensitivity-or-censorship-lecturers-are-finding-it-difficult-to-talk-about-china-in-class-164066?utm_medium=email&utm_campaign=Latest%20from%20The%20Conversation%20for%20July%208%202021%20-%201996419600&utm_content=Latest%20from%20The%20Conversation%20for%20July%208%202021%20-%201996419600+CID_14a38ceb026dee8d10dceb6b59ffb3c6&utm_source=campaign_monitor&utm_term=Cultural%20sensitivity%20or%20censorship%20Lecturers%20are%20finding%20it%20difficult%20to%20talk%20about%20China%20in%20class

29/04/2021

One China or Two?

29 April 2021

The One China policy was basically the recognition of reality. Mainland Communist China won the revolution in 1949, and when China got its economic act together the world needed to trade with it as it was far more economically significant than Taiwan.

Chiang Kai-shek, the Kuomintang leader, was defeated by Mao Tse Tung and fled to the island that had previously been called Formosa, now Taiwan. He maintained the idea that he would lead a counter-revolution, so there was One China. This counter-revolution became increasingly ridiculous with time, but was not abandoned. The Communists claimed Taiwan and treat it as a rebel province, and they stated that there is One China and that the price of trading with them was to have Taiwan excluded from the UN and other international bodies. That has been the situation for many years, and almost all countries accepted the One China policy, and stopped recognising Taiwan, even if they traded with it.

By definition, if there is One China, who governs Taiwan is an internal Chinese matter. We may not like what China does in Hong Kong, with the Uighurs or in Taiwan, but it is the US that has accepted the One China policy for years.

After WW2 at Bretton Woods it was assumed that free trade would allow countries that were competitive to rise, and those that were not competitive to fall. This was so that there would not be war over markets. But the system that the West set up gave an advantage to countries with lower wages, and if they were smart enough to get the fruits of their labour rather than stay as colonies with foreigners owning their industries, they rose. So China rose and is now a world power and the US are now seeking to intervene in Taiwan and re-create a two-China policy. One can hardly expect China to accept this massive loss of face.

The assumption was that Taiwan would eventually solve its differences with mainland China peacefully. After recent events in Hong Kong, this has become less likely in the short and medium term, but is still viable or even inevitable in the long term, which has always been China’s position.

China has done some sabre-rattling with flights over Taiwan and obviously the recent events in Hong Kong have made everyone nervous.

This article looks at the similarities of the Chinese way of doing business to capitalism. It could be said that the model of an intelligent government cooperating with industry is more successful than a few large industries competing. Competition works if there are many small producers competing in a market. When there are a few oligopolies using trademarks or patents to make more money and not to share knowledge, the old adage that ‘private competition is the best way to run things’ starts to break down. It may not just be cheaper wages that is allowing China to out-compete the US.

Starting a war because you are losing the peace seems a very unwise course of action.

Australia has to stop being the US lapdog. We are not taking the right path.

“Americans Don’t Know How Capitalist China Is” An interview with Weijian Shan