Free trade was to be the solution to all our woes.China and India due their cheap labour forces are now the manufacturing centres of the world;but no one forsaw the pressures on energy,the foundation of all living standards on this planet.

We supply China with the cheapest energy on the planet,yet pay a premium domestically.Our living standards are falling while China's rises and they just bugger the environment.

To me a healthy economy should have a diversity of activity.We have become a service economy based on selling big holes in the ground,while China develops industry and technology.

Does a Globalised economy mean that the rich via the share market surpass national borders and thus the home country can burn?

The real wealth of any economy is in the skills and knowledge of it's people,and not just speculation of selling off anything we can lay our hands on.

China is the world's oldest existing civilisation and perhaps we should learn something from their discipline.

It's funny you say that, because our smartest researchers and technologies are bought off overseas on a constant basis. The Australian government are idiots.

No steel...the Government are not 'idiots'.. they are just as smart as the Scottish Lowlanders and nobles who sold out the highlanders to English lords to expand their sheep grazing territory..

i.e.. FAST MONEY.. and if you make enough of it fast enough, the impact of your decisions about such things as we speak will not have it's impact during your lifetime, or.. if it does, you will be sufficiently economically insulated from it due to their short sightedness.

Power Corrupts, but absolute power corrupts absolutely

I'm not sure I understand all this hand-wringing about China.

We have had our period of relative prosperity, it is bad manners to begrudge another country its time in the sun.

When I was living in Europe, Spain was little more than a cheap tourist destination, good for a fine-weather holiday with cheap paella and sangria. When I was even younger, Made in Germany and Made in Japan were both indicators of cheap - and inferior - manufactured goods. China was a communist state with a billion peasants and oppressive leadership, while Australia was a land of sunshine and opportunity that encouraged migrants from England and Greece via cheap sea passage.

The reason that the relativities change is simple economics, the laws of competitive advantage. If your average wage is $10 a month, and your competition pays $1,000 a month, sooner or later you will learn to exploit this advantage. In doing so, you will initially pay $20 a month, making your business very attractive as a place to work, but still maintaining a significant edge.

Meanwhile, your competitors will start to use the same resources - your people - by injecting capital to build a plant in your country, paying $30 a month. Workers back home will squeal about their jobs being exported, but their shareholders will benefit from the higher profit margins, and the economy at large will benefit from the overall increase in prosperity.

But as we all know, there is no such thing as a free lunch. Sooner or later there will be a dozen companies - now paying $100 a month, by the way - to start competing on a global basis.

Meanwhile, we ask our government to keep selling our minerals to the highest bidder, so that we can buy that plasma TV.

How long before a billion Chinese can afford plasma screens too? Should we care?

Even if we care, there's not much we can do about it except whinge that China shouldn't be allowed to do all the things we have been doing for generations. That's pretty rude, really.

Dear Pericles, international economics of course is a dynamic thing.

You know that. But you also know that history teaches us lessons.

Just because the British treated the Chinese abysmally, and force fed them hundreds of tons of opium so that the crown and its Lords could grow richer.. does not mean we now say "Ok China..its your turn to treat us like that"

Far better to say "Yes.. we sowed some very bad seeds there..and now that the plants are growing and spreading.. we should get rid of them before they consume our primary crop"

If we cannot see that China has the same deep down 'high level' of regard for us as the Brits did for them... we are loony.

Notice how the ethnic chinese are now telling us..no deMANDING in our own streets to 'respect china'?

Oh.. if I can beg Arjay's indulgence for a mo, (sorry arjay.. a little unfinished business with Perilous from another thread)

The difference between what I said to Ruby and what she said, is..
a)I agued my case.
b)I supported it with Islamic history and scripture.
c)I did not 'invent' a scripture which does not exist.
d)I did NOT say "all muslims have been commanded to kill ALL unbelievers.

Had I said that.. I would have absolutely been vilifiying Muslims and inciting hatred against them.

You need to re-read and this time 'understand' what I did say.

I said.."Muslims have been commanded to "fight" ..... this does not mean 'kill all' it means defeat militarily. (but you knew that didn't you.. just wanted to annoy me)
I can support that contention so easily it beggars belief, and that.. is why you confuse CONFIDENCE with 'arrogance' and condescension.

I speak from a theologically trained position, thus I can speak with a degree of authority. That is neither arrogance not condescension.

Boaz, your ability to change the subject when you don't have an argument is legendary, and this was a classic of the genre.

>>Just because the British treated the Chinese abysmally, and force fed them hundreds of tons of opium so that the crown and its Lords could grow richer.. does not mean we now say "Ok China..its your turn to treat us like that"<<

Where on earth did that little diatribe come from?

Economic reality isn't a matter of taking turns at how we treat each other, Boaz. It is how nature abhors a vacuum. It is about water forever finding a level. It is about how imbalances are predominantly temporary, when there is an awareness that imbalance exists and a will to change it.

The opium wars have as much relevance to modern Anglo-Sino relationships as the Battle of New Orleans has on Anglo-US relationships. But more importantly, neither has the slightest relevance to the topic here, which is about free trade, the impact of globalization and the value of labour.

Since you mention it though, I am sure you are aware that one of the harshest impositions on the Chinese of the Treaty of Tientsin was that it allowed the propagation of Christianity in China. This was accurately described by one commentator as "the traditional values of an entire culture undermined by Christian missionaries".

If ever there was an example of how "the British treated the Chinese abysmally", this was it.

Economic warfare is one thing. Messing with their minds is entirely another.

Hi Pericles, I doubt that the line of our last few posts here will lead to much productive, so I want to actually DO what you claimed I did in the last couple. "Change the subject" kind of.

Regarding China..

RACIAL AND RELIGIOUS VILIFICATION ACT...

Opinions invited on this from all sides.

Is it 'inciting hatred' against Chinese to say (public sign, or forum)

'FREE TIBET'

Yes no or maybe.. (it implies Tibet is held captive by... 'China')

How about "FREE TIBET FROM CHINESE OPPRESSION"?

Could this be understood as condemning ALL Chinese? Thus the Chinese 'race' is vilified and people will be more likely now to hate chinese simply because of their race?

We could add a few adjectives to spice it up of course.

"FREE TIBET FROM CRUEL INHUMAN CHINESE OPPRESSION AND RACIST IMPERIALISM"

In my view, it could not be vilification in the meaning of the act unless one said

"Free Tibet from Chinese oppression and fight against all Chinese everywhere"

I'd be most interested in responses to this :)

It is easy to accept that China's manufacture competitive advantage is its low labour cost. Both politician and average people like to accept it.

China's competitive advantage is decided by its technology, low labour cost, abundant quality human resource, economic scale, infrastructure etc.

If I say that China's competitive advantage is also based on its advanced techniques, few Australian is willing to accept it.

But, please considering that there are hundreds of research institutes in China, which each houses thousands of research engineers, are there ten this kind of research institutes in Australia? Of all Australian professionals, how many are Chinese Australian?

There are a lot of reason that not many Australian like R & D job, and maybe it is part of Australian culture.

Centra,65 Chinese make one Australian.Unlike China we don't treasure human intellect.Our Govt does not aid or back Aust innovation or inventions.Most of it goes to the US,Europe or in the case of solar technology,to China.
Presently,China is trying to buy BHP/Biliton and when they will eventually do it,what power will they then hold over our own Govt?

This free trade debacle is all about giving power to a select few.This is not good economics!

1. China is the biggest in population country on our planet. That means the biggest market in the world.
2. Modern industries cost very much but they are very productive, The minimum daily quantity to cover their basic expenses is enough high and only countries with big markets can use them.
3. A big market as China gives the opportunity for the creation of many and different kind of modern industries. Each industry partly could support others while the whole economy do not depend from one from one industry or one kind of industries. Any problem in any kind of industry could have low impact in the whole market or country. That means big many,modern industries in a stable environment, that means excellent environment to attract foreign investors.
4. Cheap, skilled, hard working employees, high productivity extremely low working costs give one more high advantage to China.
5. Without China's low cost consumer products many developed countries could have huge social problems, they need China more than China needs them. That means USA or any other country is benefited from Chine and they would prefer to support China in difficult times, than to find their self with big problems.
Antonios Symeonakis
Adelaide

Arjay, 'twas ever thus, I'm afraid.

>>This free trade debacle is all about giving power to a select few.This is not good economics!<<

On the contrary, it IS economics.

A few posters have pointed out the obvious. The US and Europe, as highly developed economies, have for the past thirty years provided China with an ideal market for its products. Using the money it has earned, China was able to invest heavily in its own internal economic advancement. Hundreds of millions of its citizens were able to cross the poverty line, as better-paying jobs became available.

This in turn created enough wealth internally to sustain massive growth of those businesses, since not only can Californians buy its products, but its own citizenry can.

"The select few" are all those countries in the same position as China. A healthy spread of export markets, and a fast-growing internal market. Perfect conditions in which to grow a powerful nation.

My question stands: why begrudge them the opportunity they have created? Why even question it? It is after all how all sound international economies grow and prosper.

And Boaz, I'm not surprised you ducked the Treaty of Tientsen issue. However, you have asked a couple of interesting questions on the topic of racial vilification. Off topic, but here goes.

"Free Tibet" is a slogan carried on placards. It is harmless. "Free Tibet from Chinese oppression" is a slogan carried on placards, and is harmless until you parade it in Tiananmen Square. "Free Tibet From Cruel Inhuman Chinese Oppression And Racist Imperialism" is probably too long for a placard - one's attention tends to wander half way through. I doubt very much whether it comes under the heading of racial vilification, though, since you are referring to a country's government policy, as opposed to racial characteristics.

I still wouldn't recommend waving it about in Tianenman Square, though.

Have a great day.

China is an economic disaster waiting to happen. Many of the workers are little better than slaves. Their money is being recycled rather than made. They are, quite literally, being paid from their own forced savings.
There is an economic elite of course which makes it appear that China is booming. It is also highly corrupt.
All this is combined with a power base that is both terrified of losing control and also determined to dictate not just to the Chinese but the rest of the world.
Australia needs to find other markets - and find them fast. We have far too many eggs in the China basket. The world should not begin and end with China but it will for Australia if we continue to allow the Chinese leadership to dictate to us. There is the rest of Asia, there is Africa, there is South America and, believe it or not, Europe and the Middle East still exist too. It is time Australia started to expand horizons rather than concentrate efforts on a country that wants to dictate how we can do business and with whom.

Whatever you are on, Communicat, I'd stop if I were you before it does you permanent damage.

>>China is an economic disaster waiting to happen.<<

China is the world's second-largest economy, after the USA

>>Many of the workers are little better than slaves.<<

There are 8% of the population below the poverty line, down from 30% 30 years ago.

http://www.exxun.com/China/e_ec.html

>>Their money is being recycled rather than made.<<

China's 2007 trade balance (exports over imports) was $200 billion. Their gold and foreign exchange reserves stand at $1.5 trillion.

>>Australia needs to find other markets - and find them fast. We have far too many eggs in the China basket<<

China is not Australia's main trading partner - they presently sit at about the same level as New Zealand, and way behind the UK and US. However, this will certainly change, as the China market continues to expand faster than the others.

>>It is time Australia started to expand horizons rather than concentrate efforts on a country that wants to dictate how we can do business and with whom.<<

I'm sorry, I must have missed something.

The only person who wants to dictate how our country does business and with whom, Communicat, appears to be you.

Pericles,you make some very good points,however China and India have made energy very expensive.It is cheap energy which underpins real living standards.Unless we find cheap alternatives,our living standards will fall while their's rises.
China also as it assumes the mantle of world economic powerhouse,needs to move away from this totalitarian mentality for the good of all humanity.Only one third of their pop are presently involved in this present industrial revolution.What can they achieve when they really hit their straps?

Arjay,
Thanks to China USA economy do not collapse! The war in Iraq costs very much, trillions of dollars, and all these money are borrowed, mainly from China!