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Tag: China

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

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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 3rd 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

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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.

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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
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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.

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Chinese Doublespeak as their World Influence Rises

4 February 2021

President Xi Jinping has installed himself as leader of China for the foreseeable future. Central to this is the domination of the Chinese Communist Party.  It does not really matter what a party calls itself if it has unchallenged power.  It objectives will set the policy of that nation totally.

The West has for years preached competition as the route to efficiency, but at the same time its governments have made trade deals that disfavour developing economies, and assume that their companies will be the ones getting access to markets. As they have done this, they have tended to turn a blind eye to the development of monopolies and oligopolies in the multinational companies and a blind eye to their tax avoidance; perhaps because the companies in tax havens buy US bonds as they have to store their money somewhere. Western governments have become weaker relative to multinational corporations.  The Chinese model has a government able to make the rules for the whole economy and focus on priorities in a way that the West has rendered itself usable to do.  This is effectively a new economic model, the implications of which do not seem to have had the attention that they deserve.

Now China is asserting itself.  It has taken over Hong Kong to quell any idea of democratic movements.  It is doing bad things to the Uighurs.  It has fortified islands in the South China Sea.  It is building its military and flying over Taiwan, which it claims is merely a wayward province, so dealing with it would be ‘an internal matter’.  Most of the West has conceded that there is only ‘One China’ is order to be able to trade with China, so they will have trouble with opposing the theory of a Chinese takeover, not to mention the practicalities. China is taking a hard-line with Australia on trade, perhaps just to demonstrate its strength to and on an uppity middle power like Australia who shot their mouth off over COVID in Wuhan and would not let Huawei put in their 5G network.

But China is also preaching equality between nations, which is presumably aimed at the Third World, so that it will seem their champion against the Colonial West. It has raised many of its own people out of poverty. This may be necessary to keep its people controlled, but that policy is good.  Its building of infrastructure in Africa is soft power, which looks a lot like a more modern style of colonialism; but time will tell.

The Belt and Road initiative from Beijing to Western Europe incorporating South Asia as well will take in 65% of the World’s population. It also uses local currencies and the Yuan, which effectively means it excludes the US and the US dollar, which will hugely weaken the US as its significance increases.

Here are two articles, one highly critical of China, the other overlooking its militancy.

www.smh.com.au/world/asia/two-track-xi-reveals-china-is-in-no-mood-for-reconciliation-20210126-p56wvm.html

www.informationclearinghouse.info/56266.htm

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China and the Taiwan Question. 1/1/21

As China increasingly decides to assert its status as a World Power, Australia has been given the message fairly clearly.

Morrison foolishly, and perhaps encouraged by Trump in his pre-election hubris, criticised China’s management of the Coronavirus.  If China was looking for a middle-sized power to humiliate using its Trade power, Australia had stepped conveniently stepped into the role. This is still playing out. If China squeezes hard, we are likely to have a recession and Morrison will lose the election.  If not, probably not.

China is asserting its dominance over the South China Sea by building bases on the Spratly Islands, and the US and Australia are sailing through them to show that they still can, but this does not prove that the balance of power is not shifting quite dramatically China’s way.

China has asserted that it is not a democracy and that the Communist party will be dominant for the foreseeable future.  It did not tolerate independence in Tibet, nor with the Uighurs, and most recently with Hong Kong, moving to crush local democracy, lest anyone else in China get ideas.  The democracy activists in Hong Kong who tried to escape to Taiwan by speedboat were caught, tried and imprisoned (ABC News 30/12/20).

Taiwan, which had an indigenous population as Formosa, became Taiwan, when Chiang Kai-shek, the pro-US, Nationalist loser of the Chinese Revolution fled there with 2 million Chinese in 1949.  Their safety at that time was guaranteed by the US Navy and their economy benefitted mightily from the Korean War (1950-53), where they industrialised to manufacture goods for the US war effort.  The US has effectively guaranteed their separateness from China.  China has never accepted that Taiwan is a separate country, regarding it as a renegade province that will eventually return to China by negotiation.  Taiwan agreed that there was One China, as it intended to overthrow the Communists and re-establish their Nationalist government.  This has become increasingly unlikely and is now at the point of absurdity, but political parties that are pro-reunification with the mainland have been doing quite badly in Taiwanese democratic elections.  The Taiwanese population enjoy both democracy and relatively high incomes.  They are naturally concerned with events in Hong Kong, as they are the next domino. 

If China wanted a military victory and to assert its new Great Power status moving across a short strait into its own backyard would seem the logical step, and it is doubtful that the US would have the capacity to prevent this, even if it had the will.

Frankly, Australia has to accept the reality that China has arrived at great power status.  We cannot get involved in a war over Taiwan.  We should take a more neutral position between the US and China, and think in terms of more intelligent trade bargaining and not selling out our assets to foreign powers of any colour.

http://www.informationclearinghouse.info/56111.htm

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The China Trade Reality

China is a rising power with 1.3 Billion people. Its government is totalitarian, and focussed on improving its place in the world. From a Chinese point of view the West exploited it when it could, and it is now taking its rightful place as the Middle Kingdom, in the centre with others coming to it. […]

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