I am pleased to hear that Australia has a vigorous level of manufacturing exports. I note the author's credentials as head an Austrade functionary and then apply a dose of salt.

I was surprised when I bought my new fully imported car that the air conditioning unit was fitted to the vehicle in the storage yeard in Australia within 30 minutes of me ordering the vehicle. Then someone said that when they bought Mac computers in England the Mac shop pulled the computer off the shelf. The Macs sold in England are fully built in China. Macs sold in Australia are built to order in Sydney. I think these are 2 examples of corporations doing final assembly in Australia for tax breaks, export credits etc.

As I have said in previous posts, while we continue to tax corporations on their profit rather than their turnover then corporations are going to continue exporting production overseas so that they can take their profits in a low tax country like Nauru.

This will not stop Chinese working for peanuts, but how can Australians live in our cities if workers are paid peanuts? Do you see employers building barracks for workers?

The sad reality is that we import twice as much as we export - and we are now importing food.
Only Aldi is sourcing more food from Australia, probably because
- the food manufacturers are very competitive as Coles and Woolies import food
- the Aldi brothers can write off the losses on their Australian subsidiary against their parent company profit

It must say something about our respective characters that I tend to respond more to your posts than any other, Boaz, but I simply cannot help myself.

You say

>>If we knowingly support the inhuman and expliotative [sic] near slavery practices of other countries such as China, we are culpably guilty of colluding with them<<

and

>>If our prosperity is based on the degrading and abusive treatment of others, we are guilty of immoral conduct<<

The fact that these countries pay their workers a lower wage compared to ours does not imply slavery. As has occurred in many other countries within living memory, economies are built gradually over decades, beginning with labour-intensive activities and graduating to higher value-add processes. China is no different in this than post-war Germany, post-war Japan, South Korea, Malaysia, Thailand Philippines, VietNam and many many others.

Sure, much has been made of the working conditions in these places over the years, mostly by companies disadvantaged by the lower cost base of their competitors. But in the self-serving fuss that is made is a core truth; the workers themselves know that the discomfort they experience is merely a stepping-stone to greater individual prosperity. While no-one should condone cruelty of any kind, a greater cruelty would be to deny these folks the opportunity to drag themselves up by their own bootstraps out of their poverty.

Your protest, Boaz, is the natural reaction of a manufacturer disadvantaged by another country's labour costs. But please don't pretend that your concern is for the individual worker: they would, on the whole, rather be employed than not.

Furthermore, your solution (“TAX their products UNTIL the government legislates for better wages and conditions”) is pure protectionism, despite your protestation that “ we are not protecting our industry we are protecting Chinese workers”.

The increase in price will, presumably, make them less competitive with your product, and therefore reduce demand. How, exactly, does this “protect Chinese workers”?

Is it just me, or is this not just a tad hypocritical?

Spot on, Pericles

BOAZ_David, how on earth do you think that taxing Chinese exports would make Chinese workers better off? Taxes don’t make societies richer, and nor does government legislation. A country’s standard of living is determined by the quantity and value of things it can produce. In China’s case, these have been expanding at an astounding rate for 30 years, since China began progressively opening itself up to the global economy.

The number of Chinese living in absolute poverty has fallen from 634 million (or 64 per cent of its total population) in 1981 to 212 million (or 17 per cent of its total population) in 2001. In other words, in one generation the number of people escaping poverty is more than 400,000 - approximately the same as the population of Western Europe. According to the ILO “A reduction in poverty on this scale and within such a short time is unprecedented in history.”

Of course, by our standards, most Chinese are still extremely poor; and the number still in absolute poverty is an awful lot. But given where China started from a few decades ago, their progress is stunning. And as Pericles says, they have every reason to hope that progress will continue, bringing them to near-western living standards within a generation, as Japan, Hong Kong, Singapore and others in Asia have achieved.

It is this process that you would bring to a halt if you succeeded in your plan for Western Countries like Australia to tax Chinese import prohibitively.

Well said Pericles.

Economies run on one of two styles, the protected or the free.

The benefits of protection are supposed job security under the larger umbrella of the nanny state. Examples can be observed from most post WWII European economies and currently the sort of dysfunctional performance we see in France, which hankers after opportunity for free export whilst retaining protected markets for its significant domestic activities, most notably the hopelessly inefficient small peasant farmers.

The benefit of free trade is greater consumer access to competitive goods, rather than the uncompetitive, underdeveloped and protected output of archaic vested manufacturers.

Another benefit of free trade model is the enhanced exchange of views which come as a by-product of trade, a benefit not to be ignored in the veritable social revolution which is influencing China after decades of communist stagnation. Admittedly, the repression has not disappeared but does any one really think it will disappear faster if we isolate and ostracize China?

The benefit to Australian manufacturing is this, Instead of focusing in the Australian domestic market, as was the practice in years gone by, unable to consider exporting because of reciprocal duties, customs, quotas and tariff walls, under the free trade model Australian Manufacturers can look at a significantly larger market which dwarfs “local demand”.

A couple of other things,

Australia has a history of political stability. If I were investing in a sophisticated new manufacturing plant, I would balance the cost of manufacturing against the security of that investment.

Australia has a relatively corruption free social ethos, I would be happier leaving my private files and details with an Australian institution than letting them be bartered and traded out through unscrupulous Indian data traders, an event which will eventually ring out the death nell for Indian call and service centers.

For myself, I am happily developing products domestically which my partners and I will eventually launch internationally. All that Australian manufacturers need is the vision and anything is possible.

BD, on this one you clearly confuse me! You claim to be a Xtian,
so when 2 billion people rise above past poverty and earn far more
then they ever did before, you are pissed off!

Lets face it, anyone in Aus who wants a job, can find one if they
try. In Karratha for instance, you are battling to find pizza
delivery boys, under 35$ an hour.

Next thing, how many of Australia's poor, benefit from the global
economy? I would say huge amounts! Go and look in Bunnings as to
who is buying power tools for 35$, something they could never dream
of. The same applies to clothes and many other items.

As a Xtian, you should be thrilled that poor people have higher wages
then they ever had before, that poor people can buy goods cheaper then ever before, whilst Aussies have never had it so good.

So why really do you have your testicles in a tangle? I really
don't know.

We in Australia have something to worry about the future... our income (GDP) is primarily mining resources and agriculture and both have a shelf life, both fundamentally use a resource we did not create but exploit, and when that eventually starts to be depleted we are going to be stuck, essentially a desert with only us Australians as the 'resource source'.

However, even blind freddy can see that silicon industry is going to keep growing and eventually become the largest revenue creating, and spending industry...cost of hardware and software will always be healthy...

We have to compete here, start like all other giants in this area like silicon valley in US did, start with the circuit boards, then to make simple chips for devices, until natural progression will lead to products that will compete with the microsofts and intel...For a start we can support this industry by buying their products over exports...

You want to see real world protectionism, not just lip service for the image, if our industry is ever 'allowed' to be created and start becoming successful, watch what the ones with the control of this market do here, eg. buy the patents and move the industry off shore, yeah to their shore...

Sam