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Two systems, one global interest - understanding China : Comments
By K.C. Boey, published 24/7/2009Stern Hu: is there a vacuum in leadership from a prime minister who majored in Chinese studies at university?
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Posted by keith, Friday, 24 July 2009 1:13:58 PM
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keith
Your solution lacks reality. China can always buy someone elses iron n coal. Yet Australia would lose its best paying market with the best future prospects overnight. To paraphrase the name of your messiah (Sir Malcolm, Thane of Packer) China has Australia by the Turnballs. China's economic power, give it the political and economic clout to determine Mr Hu's fate. China knows it can call the shots as its trade partners have nowhere to go without losing a great deal of money. I think Kev recognises that China has outgrown Australian or even US pressure. US negotiators promised to bring up the Hu case with China - however this is a miniscule influence on China. China, as the largest foreign holder of US Treasury bonds, means that China can put economic pressure on the US whenever China likes. Basically the world, especially Australia, needs China more than ever because China buys things from us. China pays top dollar for our resources and has deep pockets. We are in no position to alter our lucrative trade relationship with China. China knows this. So Mr Hu, born in China is stuck, until China can coerce Australia to drop the price of iron ore and coal further than Australian intended. Economics rule. Pete Posted by plantagenet, Friday, 24 July 2009 4:18:14 PM
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Pete,
There are a couple of relevant facts which call into question your argument. A. China is currently closing it's inefficient coal mines and increasing purchases of coking coal from Australia. It projects a 30% increase in coal consumption within the next few years (? not sure of time frame but it wasn't long) Weatern Australia it seems is likely to be the big winner here. B. China can only buy iron ore from us or Brazil. It cannot obtain high grade ore from Brazil. It's own supplies of iron ore are of so poor quality as to be almost useless. Rio and Bulliton understand the nature of their asset ... generally Australians know crock about their own resources. China's steel industry is the mainstay of it's economy. China's economy must grow at 6% to maintain current standard of living. Without our iron ore it would suffer greater calamity and social unrest than anything Australia might suffer. Bear in mind China needs to import food. It cannot feed itself. That's the bottom line. in our relationship with China. Pete China's holding of US treasury bonds isn't necessarily a positive thing for China. It would be calamatious for China if the US $ went into freefall, became virtually worthless and was replaced as the medium of exchange for international trade. And believe me that is not outside the bounds of possibilities at present. China would be acutely aware of it's current very vulunerable position. I think that played a huge part in their thinking concerning buying parts of our mines. US media commonly reports in depth such ideas, our media is simply blinkered and only ever has shallow views expressed on China and usually in line with our Government's pretty bloody timid thinking. You see my thinking and writing isn't predicated on Australian media reports, if it was I'd be thinking along the same narrow lines as you but I probably wouldn't dare expose my ignorance of the subject by accusing others of being unrealistic. Oh and your views are realistic if you exclude the two facts A and B above. Posted by keith, Saturday, 25 July 2009 12:10:42 PM
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There is a difference between economic "inter-dependence" and "co-dependence".
Australia's economic and strategic notions of "Human Security" appears out of step with its own identity, strength and goal. Be it with the three-dimensional interests of mining giants and their relationship to Climate Change or Australia's sense of need to be [is it multi-national] a economic player in the Asian Pacific. As citizens and Nation, we need to do more to self address. What is China doing? On the issue of "Human Security" this example from Dr Fergus Hanson is revealing. "Chinese aid to the region is short-term and erratic, and the secrecy with which it is conducted obstructs development outcomes and breeds suspicion." http://www.radioaustralia.net.au/asiapac/stories/200907/s2633658.htm While I respect much about China, I find her conduct over civic issues where the use of excessive use of force and authority is suppressive and heavy handed, unforgiving. http://www.globalissues.org/article/144/china-and-human-rights Regarding Business and a nations intentions to make progress and achieve the Millennium Development Goals, I encourage all nations to "clean up corruption". China needs credit for that. However, good governance be it from a government or business won't have opportunity to succeed without the effort toward real transparency. Given the lack of a coherent process or charge made to detain Hu Stern, it is difficult to find confidence, trust, integrity or one sound principle with China's foreign display towards her Australian counterpart. http://www.google.com.au/search?hl=en&q=ABC+Stephen+Smith+Hu+Stern&btnG=Search&meta= China makes many nervous be it her role in the UN Security Council, in her economic dealings in the lesser developed world, with unreserved short-sightedness and abusesive treatment of ethnic groups inside China and finally with her relations and attitude toward the government and people of Australia. If fear is an emotional response to threats and danger or considered a basic survival mechanism occurring in response to a specific stimulus I wonder, who is more apprehensive of who? Ought we fear China? http://www.miacat.com/ Posted by miacat, Saturday, 25 July 2009 2:27:35 PM
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keith
Now that I'm back I can respond to your post: The statistics you have so usefully researched can be interpretted other than the way you intended. "China is currently closing it's inefficient coal mines and increasing purchases of coking coal from Australia." This indicates China's confidence over its market power over coal suppliers. "B. China can only buy iron ore from us or Brazil" China mines a large amount of iron ore from its own mines http://en.wikipedia.org/wiki/Iron_ore#Production_and_consumption . There is no question that Australia will cut off the iron trade to China - neither Rio Tinto or BHP want that. If pushed China can and does buy on the world spot market. "... generally Australians know crock about their own resources." True "Without our iron ore it would suffer greater calamity and social unrest than anything Australia might suffer..." This is all very apocalyptic and reminiscient of US consevative pundits who hoped that the sub-prime fallout would bring China to its knees through social unrest. Hasn't happened. "Pete China's holding of US treasury bonds isn't necessarily a positive thing for China..." If the US$ went into freefall the international banking system would quickly need to find currency alternatives - this might favour the Euro or the Chinese yuan - maybe both. "China would be acutely aware of it's current very vulunerable position. I think that played a huge part in their thinking concerning buying parts of our mines." Vulnerable position or huge size and rapid growth meaning powerful position. All gowing Empires have those cosiderations. "...our media is simply blinkered and only ever has shallow views.." Yes our media is derivative and shallow usually. "You see my thinking..." We differ. It is difficult to prove the validity of our differing arguments and outlooks. The only likelihood, unfortunately, is that Mr Hu may be in gaol for months or years. Regards Pete Posted by plantagenet, Tuesday, 28 July 2009 4:04:32 PM
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Pete,
Australia is the only exporter of high grade iron ore, China's ore are so low grade they cannot be smelted at all efficiently and have limited uses. We agree on more than we differ. Posted by keith, Wednesday, 29 July 2009 2:25:02 PM
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Hu Jintao?
No Hu would give Kevvy another lecture about interferring in internal Chinese affairs. As Hu he did over Kevvy's impertinance in raising the issue of Tibet in a speech in China?
Kevvy's face was bought into question there.
China's academia?
Had the Australian media reported one of China's leading economic academic's papers responding to Kevvys economic rant, it'd be obvious how contemptuous the Chinese academia are of Kevvy's lack of intellect.
The status of Kevvyy's face was seriously questioned there.
China's media?
They'd only report on the status of Kevvy's face.
I think the Chinese regard Kevvy not as having lost face but as both without face and not wanting face.
So with who can he talk?
K.C.Boey suggests an alternative leadership group to that of Hu Jintao?
Fearing Kevvy's past erratic actions and responses they'd be terrified of being associated with him and fear a loss of face through association.
K C Boey sees wisdom where Kevvy's ineffective response only highlights his loss of power. Kevvy has nowhere to go in China. What he can do is rehabilitate himself. To do that he has to take decisive action that is seen to free our countryman Mr Hu.
Put in this position I'd realise what was paramount. My ego, relations between two countries, or the freedoms and rights of one of my fellow citizens.
I'd immediately resign in favour of someone who could have reasonable expectation of influencing the Chinese to free Hu
or
present the Hu with an ultimatum at 8.00am EST Monday that unless Mr Hu is freed within two hours I would release to the Australian Media the following statement.
'As of midday EST today all shipments of iron ore and coking coal from Australia to China are banned.'
Hu would assess the effect such a message on the value of shares on the local stock markets. Hu would see his future in chaos and our Mr Hu would be released in two minutes.
End of crisis.
All it would take is a good old Australian guts.