Deepening Crown China crisis howls warning to Australia

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So, Australia, you want to dance with the devil, from The Australian:

China’s crackdown on James Packer’s Crown Resorts has widened, with 10 Chinese organisers of junkets licensed by the casino operator to bring high rollers to its Australian properties now believed to be in custody.

A day after 18 Crown employees in China were detained in lightning raids across the country, police moved on 87 Crown customers, inviting them to “take tea” — or present themselves for questioning.

Ten of them, who are organisers of junkets, were detained and ­remain in custody, The Australian understands.

An industry insider said Crown customers were furious that the company’s database was reportedly in the hands of ­Chinese authorities, following their seizure of the employees’ computers and smartphones during the arrests.

It also emerged yesterday that a Crown executive was warned by a customer based in Shanghai, two weeks before authorities acted, that trouble was brewing. The arrests, in co-ordinated nationwide raids, took place overnight on October 14.

The Crown team had been tracked by authorities for about a year, the insider said.

The surveillance revealed to authorities the amount of money leaving China for gaming tables in Australia, which was the core factor driving the arrests.

So, we have a convergence of sovereign, legal and Communist Party objectives here that has absolutely nothing to do with any Western notion of the rule of law.

This is a nice little proxy for where Australia will be within a few years if it keeps drifting the way it is into the arms of Chinese economic imperialism. All we’ll need to do is keep importing Chinese people and capital and it will happen by default.

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To avoid this fate we need urgent policy remediation. That means that China must be pushed back on three levels:

  • direct political influence;
  • economic and social suasion through direct ownership of strategic assets, and
  • economic and social suasion through wealth.

Each of these can be achieved relatively painlessly by:

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  • banning foreign donations to political parties (what’s happened to that?)
  • banning investment in strategic assets and
  • lowering immigration, reining the “citizenship exports” sectors and policing foreign buying of realty properly.

The last three are actually pretty easy to achieve. In fact, before a few years ago, none even existed as an issue. They have only become so in recent years owing to the rise of an extreme ideology in Canberra that MB calls the McKibbin Doctrine, that it is OK to sell the kitchen sink to China. A decent leadership narrative will push out the real estate interests.

This bifurcated regime for dealing with China won’t last forever. But it is a system that offers clarity and sustainability to our Great and Powerful economic partner, while supporting ANZUS and our Great and Powerful strategic partner, while limiting our dependence upon either.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.