Monday, September 6, 2010

Is China really a threat to Australia?

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Maybe the problem with the administration of George Bush was not simply his poor policy judgement, but his choice of friends, and ‘advisers’. According to the SMH Online, Philippa Malmgren, an adviser to George Bush as well as Deutsche Bank, is suggesting that Australia should lock China out of owning Australian resource assets. The problem with this policy is:
1. Imperialistic fear peddling at its worst, i.e. The old ‘them & us’ talk of China taking over the world.
2. Poor role model. Are we not trying to encourage China to end its collectivist history of socialism, by adopting capitalism, i.e. free markets. This counter positioning of fascist imperialism is not the antidote. Intellectual integrity is.
3. Poor empirical evidence for his views. If we look at Japan, Australia was not taken over by Japan. China is 10x bigger, so it will have 10x the impact Japan did, if not more
4. How do we make China more threatening by making it depend on us less
5. Plenty of competition – if we make access to Australia difficult for China, they will go elsewhere
6. Respecting the role of China – If we respect the role of China as a processor of raw materials, we stand a better chance of being respected as a ‘reliable supplier; of minerals....it might then not look elsewhere for minerals
7. The Australian government retains the right to arbitrarily tax all production from Australia. A power it should not exercise.
8. Why would it make good policy to impose a specific tax or ‘control’ upon the Chinese. Does that not descend to the worst levels of political diplomacy.
9. China buying up a lot of resources can only be good for Australia. We will only benefit from the mass liquidation of wealth, which we can free up for other purposes.
10. Why should we fear China buying into Australian mines. It could only raise gross export revenues for Australia. Australians would be better educated to appreciate the value of iron ore and other mineral assets, so these assets are fully valued when sold to the Chinese.
We don’t need to resort to extortion in order to produce wealth...we need only do what we do best, and allow the Chinese to do the same. Capitalism is based on the principle of trading value for value for mutual benefit.
The greater issue for Australia is how we will squander the wealth that we derive from China's participation in our economy. We have to fear the prospect of 'easy money' resulting in excessive welfarism as well as decadence. The pertinent precedence in this instance is Norway.
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Author
Andrew Sheldon
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