Bob Carr (or is that Yuhu Group?) fights back!

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Bob Carr made a fist of defending himself at The Australian over the weekend:

Some of the commentary unleashed in the past week has been a defamation of this successful Chinese diaspora.

…None of us knows the character China will assume domestically — it could be a transition like Singapore’s (or Taiwan’s, or South Korea’s) or, to its own cost, it could stay frozen in authoritarian mode.

Wise to keep options open, as for the most part Abbott and Malcolm Turnbull have done, and to deploy what Paul Keating, in a recent conversation with Kerry O’Brien, called “the elasticity of diplomacy” — that is, to bridge gaps of political values and stay open to possibility.

“Our interests aren’t always the same as a great power’s,” former Department of Foreign Affairs and Trade secretary Dennis Richardson said when I was foreign minister, talking about this very question. Of course, we could overlook this wisdom and just do what we imagine is acceptable to Washington — on patrols, on the AIIB, on subs. But in truth the US would not be surprised if, like all its allies, we pursued a pragmatic approach to China. “Just be the most desired girl on the block,” assistant secretary of state Kurt Campbell told me in 2013 about Australia’s smartest position.

Or, to use Keating’s words, we could bet all our cards on US primacy continuing forever. That only leaves us hostage to the day Air Force One lands in Beijing and a US president, guided by Kissinger realism, alights to forge a new partnership, leaving us — as Richard Nixon left William McMahon in 1972 — in a backwater, bobbing isolated and exposed and silly.

All very nice, Bob. Now cut ties with your Yuhu Group financial backer and then we’ll listen. Or move your institute out of UTS and we’ll dismiss you. You can’t have it both ways. Even the horribly conflicted Domainfax can see that:

Then there is the High Court. The former NSW premier, Barry O’Farrell, (a man brought down by a gift) legislated a comprehensive ban on donations from corporations, unions and other organisations. But the ban was struck down by the High Court following a challenge led by the unions, with the bench ruling that banning certain types of donors was an unjustified burden on political communication.

The case saw Unions NSW and the libertarian Institute of Public Affairs forge an unlikely alliance, and on Friday the IPA railed against Abbott’s prescriptions as an undemocratic, unconstitutional “attack on freedom of speech”.

Critics say any attempt to replicate O’Farrell’s failed reforms nationally would die a similar High Court death, but Adjunct Professor Colleen Lewis of Monash University, who has written a report on the issue, dismisses the concern. “You can just step over the High Court problem,” she says.

Lewis argues that if the size limit on donations was lowered to, say, $1000 or less, you would not have to ban certain types of donors, like developers, because their influence would be no larger than an individual’s.

…Australia’s politicians and political parties took $5.5 million in donations from Chinese-linked firms in the two years to June 2015, according to an ABC analysis of disclosures to the Australian Electoral Commission, and both sides of politics have benefited.

Chief among the donors is property developer Yuhu Group and its chairman Huang Xiangmo.

More than $1 million in donations to both major parties have come from companies and individuals associated with Huang, who uses his position as chair of the Australian Council for the Promotion of Peaceful Reunification of China (ACPPRC) to promote Beijing’s core interests, including lobbying against Tibet and Taiwan independence.

The Bayside Forum, which supports the federal Liberal seat of Goldstein which was held by former trade minister Andrew Robb up until his retirement, received $100,000 from interests linked to Huang, including $50,000 on the day the China-Australia free trade agreement was finalised and announced by Robb and then prime minister Tony Abbott. Robb also endorsed Yuhu’s $2 billion agriculture investment joint venture fund at its launch in September 2014.

And interests linked to Huang donated $280,000 to the Western Australian division of the Liberal Party. Foreign Affairs Minister Julie Bishop, the leading federal member of the party in that state, has been effusive in praise of Huang’s contribution to Australia and helped open the Australia-China Relations Institute (ACRI) at the University of Technology , which was funded by Huang’s $1.8 million donation.

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The list of those targeted is growing, from The Australian:

sdfs

Also, from Greg Sheridan:

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The Coalition government early last year set up a wide-ranging ­intelligence and analysis effort to try to chart the extent of Chinese government influence within Australia.

…The Abbott government received an initial report from the agencies’ analytical project.

Overall, the project revealed an unprecedented Chinese effort to penetrate and manipulate Australian elites in order to further Beijing’s strategic policy.

A word of caution here. These kinds of assessments may or may not be based upon hard evidence. Spooks often rely on intuited scenarios rather than hard data – think Iraq WMD – and are by nature paranoid cults. I would not accept this kind of vague leak as proof of much.

It seems likely that Australia is on the receiving end of some kind of concerted Chinese soft power effort but its best not to think of it as emanating from some single-source of coordinated villainy. All governments are chaotic and China is no exception.

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The best way to frame this, I think, is that Australia is being colonised by China’s economic imperialism. We’ve seen this before from our great strategic ally the United States through much of the twentieth century, who’s global power grew unchecked for fifty years following the second world war via a chaotic thrust of US interests that included corporations, government and spooks. Much of it was progressive but not all. Go ask certain South American or Middle Eastern counties if there is any real difference between a distant US or Chinese overlord!

In the case of Chinese economic imperialism, until recently it was largely about securing raw materials. China in Africa and South America over the past decade has traded infrastructure investment for access. In Australia it has been similar.

But now, as China attempts to jump up another level on its developmental curve to a richer country, and it muscles out in foreign policy terms, the outflow has turned to the acquisition and provision of services. To what end is unclear. Perhaps it’s to undermine American supremacy in the Pacific. Perhaps it’s to acquire intellectual property. Perhaps it’s just to get rich. Perhaps it is to bolster Communist rule at home. It’s probably all of the above in the usual chaotic mix of the power politics of nations.

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Viewed through this prism, the horrible irony confronting Bob Carr is that as he argues for greater sympathy to the Chinese cause and, in his mind, for Australian independent foreign policy, his utterances are already colonised by whatever vague form it is that Chinese economic imperialism has taken on. Likewise, for Australia, Bob Carr’s path to greater Chinese economic integration will not lead to an independent foreign policy. On the contrary, it will curtail Australia’s strategic options as its economic dependence mushrooms.

That’s the rub in this debate. If you pursue greater economic integration with China now – which pretty much represents a full blown colonisation of Australia’s burgeoning “citizenship exports” economic model – then you are not running an independent foreign policy at all. On the contrary, you are running straight into the Chinese sphere of influence and it will not be many years – probably in the single digits – before the cost of refusing China anything is so high economically that a strategic outlook reliant upon US interests ceases to have any meaning at all.

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.