We have always been a small fish in a big pond. Yes, the big fish in the pond are going through a "restructuring", but really will our position change that much? We have been out-bid by Japan in the aid stakes for some time. We have been out gunned by any number of players, but it seems to me by the time they are rich enough to out-gun us the cost of actually doing anything becomes prohibitively expensive for them.

What worries me about China's ascendancy is more mundane things, like the annihilation of our manufacturing industries. It seems unavoidable until their wages hit parity with ours, but I do wonder about the cost of resurrecting it when the time comes. It will take a long time to rebuild the education systems, the business know-how and finally the plants if it all dies off for a generation.

This article well highlights the sort of strategic thinking Australia should be able to do, and should be doing now, on China, but isn't. How come China is constructing East Timor's new Foreign Ministry, Presidential Palace and Defence Ministry? They're particularly sensitive facilities and they're right on Australia's doorstep. This brings to mind the bugging of the Chinese Embassy building in Canberra many years ago. Australia should be handling the construction of these sorts of buildings in Dili as part of our ongoing aid program for East Timor. Who's asleep in Canberra and who's likely to bother waking them up? Warren Reed.

Thanks for your comments rstuart and Warren Reed

Another article (from 2003) http://findarticles.com/p/articles/mi_m2751/is_72/ai_105369903/pg_8 gives further detail about the type of aid China has been delivering in our backyard:

"...much of the assistance to date has been for highly visible prestige projects, including the construction of a new parliamentary complex in Vanuatu, a multistory government office in Samoa, the new foreign ministry headquarters in Papua New Guinea, ... and has made a practice of donating a fleet of VIP cars [maybe bugs - Watchout] to the island state hosting the annual [South Pacific] Forum meeting. These projects have added little or nothing to the recipients' economic development, however, because China provides all the materials and labor for the construction of aid projects."

"Meanwhile, since the end of the Cold War, Western aid donors have increasingly attached governance conditions of accountability, transparency, human rights and democracy to aid arrangements. When democracy is overthrown by a coup, as happened in Fiji and the Solomon Islands, the curtailment of Western aid disbursements has created resentment. By contrast, China has been widely praised for its policy of "noninterference", which contrasts sharply, as the locals see it, to the "bullying" tactics of Australia and New Zealand."

Would such "noninterference" be a good approach for Australia?

Peter Coates

I suppose it is natural that a country with a size and population of
China's will one way or another throw its weight around.

What concerns me is the financial invasion of Australia.
The share buying of resources companies has been in operation around
the world and has now shifted to Australia.
Remember the quote from the Chinese PM;
"We will burn all our coal and then burn yours"

The rapid increase in oil prices may modify China's ability to suck
money out of the rest of the world. The price of shipping a container
from China to the USA has risen from $3000 to around $8000 plus.
One sign of the times is that furniture manufacture is moving back to
the US. This effect will be found first in bulky goods.

China is in for a difficult time as trade flows shift due to energy
costs. They will face increasing difficulty in getting sufficient
coal and oil at prices that will enable business as usual.
The risk is that they will enter the oil and coal wars.
What would be their reaction if the greens by means of their vote
in the senate stopped coal exports to China because they will not
adopt the same CO2 restriction that we adopt ?

These are the big risks.

My question, every time I see yet another article that sobs "the Chinese are coming, the Chinese are coming", is... so what?

Maybe if someone could explain to me why economic colonization is only OK when it is undertaken by the USA?

Or why it is OK for Australian companies to expand overseas, buying up gold mines, toll roads etc., but the same activity is somehow to be feared when conducted by foreign investors on our soil.

Economic fortunes wax and wane. China has been a - the, even - major world power before. So, its turn has come round again.

So what?

Britain, Spain, Portugal all used to have extensive world "interests", that were built on similar foundations.

So what exactly is it about China's actions that cause so much angst and hand-wringing?

China's economy is following a path that many have previously trod. Similarly, it is buying influence in underdeveloped nations in much the same way as they had been colonized in previous centuries.

Instead of the interminable string of articles documenting the obvious, it would be interesting to hear from someone who actually bothers to analyze why we react automatically with fear and trepidation

Do we fear invasion? Is that what this is all about?

There are far simpler ways to achieve economic advancement these days than going to war. And prosperity is not a zero-sum game, as we have discovered over the years. If China becomes relatively more prosperous than us, more power to their elbow - it does not necessarily mean that our prosperity declines as a result.

Pericles, I would suggest that you take a good hard look at how the Chinese government does business with its own citizens and then you might be a bit more concerned about them taking over here.

David