2009/08/12

China, With Gloves Off

Watch The Ball, Watch The Spin, Now Hit It

Bagging out China for its total uncouthness in the diplomacy stakes is not exactly new. After all, the west is pretty phobic when it comes to upstart 'chinks' and 'gooks', nips and whatever else slurs they have for the rest.

In turn, China is pretty unapologetic about its burgeoning power. Leading up to the 2008 Olympics, China made a pretty big point that it was central to the fate of the world, and the subsequent events of the GFC have shown that it likes having sway over the way the world goes.

So, the classic dramatic schema of irresistable force meeting immovable object takes shape. In this instance, China might see itself as the irresistable force of history as a nation with a quarter of the world's population seeks to live the high life of the advanced nations, after a couple of centuries in which it lagged behind. But it sort of has to join the club of advanced nation that have already arrived at post-modernity and a post-industrial economies, and they are disdainful of what China sees as its own strengths.

In this light, we've been reading a few articles in the SMH about China nd what exactly is going on, Michael Pascoe had this derisive piece.
The danger in dealing with a pig-ignorant bureaucrat in an authoritarian regime is that the moment their stupidity and ineptitude is exposed, they will use all their power to blame someone else. So it seems with the China Iron and Steel Association's secretary general, Shan Shanghua, and Rio Tinto.

If it wasn't for the fact that four men are facing years in a Chinese jail because of it, the latest development in the Rio Tinto/Stern Hu case would be simply laughable - either that or Rio has been capable of greater magic than anything Harry Potter has imagined.

Maybe the China Iron and Steel Association doesn't realise Ms Rowling's books are fiction - how else could China allege Rio has  overcharged by $123 billion for iron ore shipments over the past six years when that is more than the total value of its shipments?

Such a ridiculous allegation, the stuff of a loony propaganda machine, is a sign of desperation. And Shan Shanghua is understandably desperate.

Shan first came to popular attention as the goose who triumphantly hissed back in February that the proposed Chinalco bailout of Rio would ''help China break the duopoly in Australian iron ore supply over the long term''.

Dumb, Shan, plain dumb - unless you're secretly a double-agent, working for the anti-Chinalco forces. No matter how much you might have hoped it, or even if you planned it, to speak such a thought was sheer stupidity. Take a bow, Shan Shanghua, for doing as much as anyone could in sinking the Chinalco deal.

I often think Westerners underestimate just how bloody-minded the Chinese administration can be. If you put me on the spot I'd tell you that they don't fear the shedding of blood as we in the post-modern world do. In a part of the world where human rights don't count for shit, shedding blood is not that big a deal. In that sense the incarceration of Stern Hu may go against all our sensibilities, but it just doesn't matter over there in the twilight of Middle-Flower-Kingdom-thinking.

It might be dumb of this bureaucrat to be doing ths stuff, and it may hurt China's cause somewhat but it's also going to hurt some people and they don't care as long as it hurts.

Peter Hartcher has this piece today in the SMH.
We already know what it's like to live in the new China growth zone. That was all the exuberant news about resource prices. Now Beijing is instructing us in what it might feel like to live in the China political zone as well.

Together with the other evidence - Beijing's hamfisted efforts to ban a film about its Uighur minority at the Melbourne Film Festival, its angry campaign to block a visit to Australia by the exiled Uighur leader Rebiya Kadeer, its chilliness in rebuffing the Rudd Government over the Stern Hu case - this is a clear sign that the Chinese regime has consciously decided to take a tougher line with Australia.

Why? First, Australia displeased Beijing. The principal reason for Chinese interest in Australia is its resources. When the big state-owned firm Chinalco wanted to increase its share in the world-class minerals assets of Rio in a $25 billion deal, Beijing was unhappy at the political wariness with which it was greeted in Canberra.

It would have been the biggest overseas acquisition that communist China had ever made.

The Australian Government did not block the deal. Indeed, it said repeatedly Chinese investment was welcome. But Canberra did put conditions on smaller takeovers of other resource assets by Chinese state-owned companies. This entrenched a principle, and it boded ill for the Chinalco deal.

The Opposition's Peter Costello was outspoken in expressing reservations about the Chinalco bid. Rio, reading the political climate, abandoned the deal.

China's leaders seem to have decided to make this rebuff an opportunity to teach a lesson to Rio, to Australia, and anyone else watching. This is the second dimension to China's angry new attitude.

It's an old Chinese folk saying - "kill the chicken to scare the monkey." In other words, you punish the weaker enemy to frighten the stronger. With a new president in the White House and a heightened mood of protectionism in the US Congress, is Beijing using Australia as the chicken to scare the American monkey?

He concludes by saying that we should stop deluding ourselves that China is harmless or completely benevolent. Well, yeah Mr. Hartcher, the place is full of Mainland-Chinese, and I'm telling you those guys are nuts. not to mention the  blokes outnumber the sheilas 9 to 1 and there's a lot of frustration going on there.

Anyway, jokes aside, if China's carrying on with this kind of policy application, then it seems to me China's up for a bit of Economic warfare while it holds the upper hand. Think about all the US Treasury bonds it is holding to Shore up the USA. So it wants to throw its weight around to its full extent to extract maximal effect.

Which is fine, you'd expect that. yet, this being what it is, it sort of reminds me how Japan got boxed into a corner with Nazi germany and went lockstep into World War II. I don't really see a good outcome down the road if China is going to do their ascension to world's preeminent economy in this manner. There's going to be a ar and were going to hate it much more than we hate our war in Afghanistan.

I guess the true test is going to come when the challenge is on and we'll find out if the world has learnt anything from the mistakes of the Twentieth century.

No comments:

Blog Archive