Rhian writes: “We are all better off - Chinese and Australians - if we produce what we're good at, and they produce what they're good at, and we trade.”

Who says the Chinese are better at producing the consumer goods in competition than Australians? I think the term Rhian is groping for is CHEAPER. Competition between workforces across national boundaries (behind which workers are by and large confined) is both based on quality (e.g. Italian boutique shoes) and price (e.g. slave production as in China and much of the rest of Asia). Importing goods on the basis of price competition uses the misery of slaves to attack wages and conditions in the importing country. This is so even when the slaves are allowed a small share of the income from sale of the goods they produce.

Sure some of the exploitation of Chinese slaves is merely thoughtless - seems good to have access to cheap goods (while forgetting the enormous social and economic consequences of destroying manufacturing industry in countries like Australia and America). The greedy pigs are those investors who shift manufacturing to slave countries - not thoughtless but carefully planned and promoted through compliant politicians, and through careerist mandarins as in DFAT, busily engineering endless free trade deals. The hullabaloo over 457 visas is a red herring.

EmperorJulian

Some basic economics

Average incomes in a country are chiefly determined by its average level of productivity. If an average Chinese person produces 25% of what an average Australian produces, their wages are going to be about 25% of Australian wages. That’s not “exploitation”, it’s inevitable. An individual Chinese teacher or production worker may be no less productive that their Australian counterpart, or even more productive. But across the Chinese economy as a whole, it takes a lot more people to produce a given quantity of goods and services than it does here, and Chinese average wages reflect that. Similarly, the growth in living standards and wages in China in recent years, and the dramatic drop in poverty, is because China is producing a lot more stuff than it used to, even though it still lags far behind Australia in its average productivity and therefore average wages.

What matters in trade is not the absolute advantage of one country over another, but comparative advantage. China may be able to produce producing both T shirts and cars more cheaply than Australia, but if it produces T shirts much more cheaply and cars only somewhat more cheaply then it makes sense for us to export cars and import T shirts.

A nice simple explanation here:
http://www.econlib.org/library/Enc/ComparativeAdvantage.html

Trade causes employment to shift from some industries to others, but it doesn’t mean unemployment overall is higher.

You may have noticed that Australia is almost unique in the developed world in having escaped a recession due the GFC. Trade with China was a crucial factor in keeping our economy growing.