China has declared forever war on Australia

First up, China has declared forever war on Aussie coal, at the ABC:

Chinese state media appears to have confirmed that Beijing has blocked Australian coal imports, in a move which is likely to cost the economy billions of dollars and further inflame tensions between the two countries.

Nationalistic state-owned tabloid The Global Times reports that China’s top economic planner has approved power plants to import coal without clearance restrictions from several countries “except for Australia”.

Australian government sources say such media reports should be treated seriously because they are generally directly sanctioned by the Chinese Government.

China has unofficially banned Australian coal imports since October, leaving dozens of bulk carriers stranded offshore.

The freeze has stoked deep anxiety in the mining industry.

Last month, Chinese authorities blamed “environmental problems” for the delays.

Australian Government officials have dismissed this explanation in private.

And the Global Times report seems to confirm that China’s leaders are now willing to publicly confirm — at least indirectly — that the ban is an act of economic punishment, and that it is likely to continue.

The newspaper quotes Wang Yongzhong, director of the Institute of Energy and Economy at the Chinese Academy of Social Sciences, who warns “Australia is gradually losing the Chinese market”.

He says China is sourcing coal from Indonesia, Russia and from Mongolia, which “could take a large share from Australian coal, as the relationship between China and Australia has been deteriorating”.

The FT has an important piece for context:

It has not taken long for the wheels to come off the Belt and Road Initiative. As recently as May 2017, China’s leader Xi Jinping stood in Beijing before a hall of nearly 30 heads of state and delegates from over 130 countries and proclaimed “a project of the century”.

This was not hyperbole. China has promised to spend about $1tn on building infrastructure in mainly developing countries around the world — and finance almost all of this through its own financial institutions. Adjusted for inflation, this total was roughly seven times what the US spent through the Marshall Plan to rebuild Europe after the second world war, according to Jonathan Hillman, author of The Emperor’s New Road.

But according to data published this week, reality is deviating sharply from Mr Xi’s script. What was conceived as the world’s biggest development programme is unravelling into what could become China’s first overseas debt crisis. Lending by the Chinese financial institutions that drive the Belt and Road, along with bilateral support to governments, has fallen off a cliff, and Beijing finds itself mired in debt renegotiations with a host of countries.

…The data that describes China’s predicament comes from researchers at Boston University who maintain an independent database on China’s overseas development finance. They found that lending by the China Development Bank and the Export-Import Bank of China collapsed from a peak of $75bn in 2016 to just $4bn last year.

The context around this is crucial. The two banks fall under the direct control of China’s state council (cabinet), so they function as arms of the state. They provide the overwhelming majority of China’s overseas development lending and the funds they disburse rival in scale those of the World Bank, the world’s largest multilateral lender.

…Yu Jie, senior research fellow on China at Chatham House, a UK think-tank, says Beijing’s recently-adopted “dual circulation” policy represents a step change for China’s relationship with the outside world. The policy, which was first mentioned at a meeting of the politburo in May, places greater emphasis on China’s domestic market — or internal circulation — and less on commerce with the outside world.

“Volatile Sino-US relations and more restrictive access to overseas markets for Chinese companies have prompted a fundamental rethink of growth drivers by Beijing’s top economic planners,” says Ms Yu. “Naturally, if state-owned enterprises decide to switch back to the domestic market in order to follow the leadership’s wishes, the budgeted financial resource for overseas investments will reduce accordingly.”

In short, the CCP is in economic retreat everywhere as it seeks to build a fortress economy that can withstand the exigencies of external hostility. We can expect this to continue as its domestic economy slows and the CCP stokes nationalism in place of prosperity to underpin its legitimacy.

Which is why Labor is just so yesterday. Its CCP flunkies continue their treasonous line:

Opposition frontbencher Madeleine King said there were no winners in trade wars.

“If this is the coalition’s idea of trade diplomacy, it’s little wonder the government has failed to deliver a credible path out its current trade woes with China,” she said.

“Australian jobs and prosperity rely on open, rules-based trade, not retaliatory, tit-for-tat measures.”

Ms King said Australia had benefited massively from the removal of trade barriers over recent decades, and imposing an export tax on iron ore would damage the world-leading industry.

Australia exported more than $100 billion worth of iron ore in the last financial year, with most of the commodity shipped to China.

The industry employs tens of thousands of Australian workers.

“Billions of dollars in trade and thousands of Australian jobs are at risk from these trade tensions,” Ms King said.

What do you suggest, Madeleine? Which of Beijing’s 14 conditions of CCP enslavement do you endorse?

The truth is, Labor is playing politics with the China relationship, not the Coalition. Very stupid, self-sabotaging politics. Every survey says the same thing: the Australian people are unswayed by Chinese threats and propaganda. China isn’t going to compromise, either. And, if our pollies do sell out the nation against the people’s wishes then that will only egg on ever more draconian demands from Beijing.

In short, there is no deal to be done. This is now the forever war and the relationship will keep deteriorating henceforth between China and the world, and especially Australia.

In short, Labor has the diametrically wrong take. We don’t need a China strategy. We need a post-China strategy.  In some ways it is underway:

  • closer military and espionage ties with the US and Five Eyes;
  • formation of like-minded democratic anti-China blocks in trade and strategy.

But the major challenge ahead is economic and it is on this front that the Morrison Government has done next-to-nothing. To grow beyond the Chinese market we will need a much more competitive economy which will mean:

  • higher productivity;
  • lower land prices;
  • cheaper energy;
  • low dollar policies;
  • manufacturing reshoring and shifted offshore supply chains;
  • competition and innovation reform;
  • vastly improve education outcomes.

This is the complete opposite of today’s mass immigration, house price pump and consume model. Even more so given the greatest opportunity to grow beyond China is to embrace post-carbon economics.

The Morrison Government has rebuffed China on instinct. Yet growing beyond it, which we have no choice but to do, will take a comprehensive reform program every bit as bold and creative as that of the 1980s, something that is nowhere in sight within the Coalition.

And this is where it turns toxic. Probably only Labor can deliver such a reform program but it is owned by the CCP so will never see government.

That means the only way it will happen is by force at the hand of global markets which means it will be much more painful and drawn out than it ever needed to be.

David Llewellyn-Smith
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Comments

  1. Must be time to start seizing Chinese owned assets in Australia in the name of the “national interest”. Can start with houses.

    • When they tried that in Zimbabwe, it destroyed their banking system because the ultimate owner turns out to be banks.

      • You just start with the ones with no mortgage, or even better, those mortgaged to Chinese banks. The ones that paid cash are probably money laundering anyway and could be seized under a “proceeds of crime” investigation.

      • Zimbabwe at the core had the correct idea. The nation’s riches belong to the people. Unfortunately it turned into, the nation’s riches belong to the party faithful. When the previous leader suddenly had a lucid moment and wanted to take the nation’s assets from exactly the power who had supported and funded his insurrection he was promptly deposed.

        • Narapoia451MEMBER

          ‘Zimbabwe had the right idea’ – not something you see written anywhere very often.
          With respect – the situation there was never driven by egalitarianism, or anything other than enriching the same group of people that had been robbing that country blind for the last 40 years. The results were as tragic as they were predictable.

          The big lesson for me – in a situation where there is a monetary collapse or a likely collapse, don’t have your life savings in fiat like my grandparents did. They were lucky my father could move them out of the country.

  2. Stewie GriffinMEMBER

    Madeleine King said there were no winners in trade wars.

    So true, so true – we should all gather round and sing Kumbi-ya together. Why can’t we all just be friends and put this male chest beating to the side, otherwise our economy will collapse!

    Openness, Agreeableness and Neuroticism.

    • Neuroticism, the endemic disease of the upper middle class (I was going to say soi disant upper middle class but didn’t want to shoot myself in the foot)

    • TailorTrashMEMBER

      …..and has anyone thought of having a vigil…..
      Vigils are good ….especially with candles and teddy bears …

    • “Openness, Agreeableness and Neuroticism”. I get the code Stewie – and totally agree. Gender has a lot to do with how Australia has changed and Labour’s policy mishmash.

      • Stewie GriffinMEMBER

        …and given a column in a national paper in order to amplify and spread neurosis throughout the rest of the nation.

        “The totality of beliefs and sentiments common to the average members of a society forms a determinate system with a life of its own. It can be termed the collective or common consciousness.”

        – Durkheim

    • boomengineeringMEMBER

      Stewie presents, word of the day, soon to rival first on WE Reading. This could be a daily award presented to whoever dares to confound, and instigate scramble to wiki.

  3. Ms King should read the comments on the FT article to see how far off the reservation she is on this issue.

  4. Everything the Wolf Wankers have done indicates that didn’t have any coherent strategy in place : they expected Australia to kowtow immediately. When that didn’t happen, they are stuck.

    Every further restrictions on trade pushes iron ore prices up. There are a lot of very angry Chinese steel makers right now.

    • Too true.

      The loss of coal and agri exports has been massively more-than made up for by the surge in iron ore prices. And to boot, they’ve driven up the price of coal domestically as Mongolia simply doesn’t have the infrastructure to transport it to where it’s needed. The Wolf Wankers have emotionally shot themselves in the foot. But then this is what happens in dictatorships.

      • ErmingtonPlumbingMEMBER

        Maybe this blow up with Australia is away for the CCP to engineer some inflation within the Chinese economy.
        Didn’t western countries spend decades inflating their debt away through wage price spirals.
        Couldn’t the Chinese be doing something similar here, picking this fight with Australia for domestic Economic reasons that deliver the added bonus of stirring up a bit of Nationalist fervour against us.

  5. ErmingtonPlumbingMEMBER

    “Probably only Labor can deliver such a reform program but it is owned by the CCP so will never see government.“

    I agree and believe the best solution to our national Predicament is for over half a million concerned and patriotic Australians to join and take over their/our Australian Labour Party and through rank-and-file democracy end this CCP, and all the other moneyed interest groups, ownership of OUR parties decision and policy making process.

    It’s your duty to join MBers,
    Im looking at you too toatesy.
    “It’s Time”

    https://www.alp.org.au/about/join-labor/

    • ALP reform government like the Hawke govt would be ideal, but that only works when you have the amount of talent that Hawkie was lucky enough to have at his disposal. Albo is not that lucky. I don’t know that a bunch of people joining the ALP solves anything, they’ve just had a round of branch stacking scandals so if you turn up with half a million people they’re just going to check how many are dead.

      • ErmingtonPlumbingMEMBER

        Branch stacking becomes increasingly difficult the larger the overall membership numbers across the country become.
        The ALP at roughly 50 thousand members has the largest membership base of any Australian political party and yet (IMHO) if we were living in a truly participatory democracy that 50k number would be between 10 and 100 times more.

        There are democratic processes within all major parties that help to guide their policy make process but it is also true to say career focused leaderships often attempt to circumvent, corrupt or just plain ignore these processes.
        This is a phenomenon that infects all small groups of individuals that hold to much unaccountable institutional power.
        It’s also why MORE democratic accountability is so crucial within all societal institutions especially within our ruling political parties.
        An interesting observation I have made over my many years in the ALP is how, across the Leadership spectrum, practically no effort is made whatsoever in attempting to expand its membership base.
        With half a million members the ALP would have no funding issues at all, no need to go cap in hand to moneyed interest for election donations but it’s something no one in the leadership seems to want to do.
        Some have said to me “know one wants to lead a rabble” I interpret that to mean Leadership would prefer to not be constantly held to democratic account or to be guided by the will of a rank and file that has the right to have their demands and ideas heard and be voted on.
        This is why you NEVER see advertising campaigns designed to increase membership.
        They (The “Leadership) want just enough members to hand out leaflets on Election Day and a few other volunteer tasks and no more than that.
        They fear a large and demanding rank and file.

        That’s why you should all join,

        https://www.alp.org.au/about/join-labor/

        • Totes BeWokeMEMBER

          When I consider Sally Mcmanus is head of a union with members being mostly a bunch of anti-woke boofheads, I don’t hold much hope membership would change Labor.

          I’m happy to hear and consider other views, but I’m very pessimistic Labor can change.

        • Wochenendlesung Bitter

          It is insightful, strongly reasoned and elegant comments like this that trigger deep and inate suspicions of you by those you’re appealing to as no true Labor man could be capable of producing them.

          • ErmingtonPlumbingMEMBER

            Here is a true “Labor man” talking about true Labor people.

            “”I have had the privilege of leading the Labor Party for nearly four years. They have not been easy times and it has not been an easy job. It is a man-killing job and would be impossible if it were not for the help of my colleagues and members of the movement.

            No Labor Minister or leader ever has an easy job. The urgency that rests behind the Labor movement, pushing it on to do things, to create new conditions, to reorganise the economy of the country, always means that the people who work within the Labor movement, people who lead, can never have an easy job. The job of the evangelist is never easy.

            Because of the turn of fortune’s wheel your Premier (Mr McGirr) and I have gained some prominence in the Labor movement. But the strength of the movement cannot come from us. We may make plans and pass legislation to help and direct the economy of the country. But the job of getting the things the people of the country want comes from the roots of the Labor movement – the people who support it.

            When I sat at a Labor meeting in the country with only ten or fifteen men there, I found a man sitting beside me who had been working in the Labor movement for 54 years. I have no doubt that many of you have been doing the same, not hoping for any advantage from the movement, not hoping for any personal gain, but because you believe in a movement that has been built up to bring better conditions to the people. Therefore, the success of the Labor Party at the next elections depends entirely, as it always has done, on the people who work.

            I try to think of the Labor movement, not as putting an extra sixpence into somebody’s pocket, or making somebody Prime Minister or Premier, but as a movement bringing something better to the people, better standards of living, greater happiness to the mass of the people. We have a great objective – the light on the hill – which we aim to reach by working the betterment of mankind not only here but anywhere we may give a helping hand. If it were not for that, the Labor movement would not be worth fighting for.

            If the movement can make someone more comfortable, give to some father or mother a greater feeling of security for their children, a feeling that if a depression comes there will be work, that the government is striving its hardest to do its best, then the Labor movement will be completely justified.

            It does not matter about persons like me who have our limitations. I only hope that the generosity, kindliness and friendliness shown to me by thousands of my colleagues in the Labor movement will continue to be given to the movement and add zest to its work.”

    • Totes BeWokeMEMBER

      I reckon there’s more nervous Labor backbenchers wanting to head back towards patriotism than there are the likes of extreme wokester Plibersek etal from the front bench.

      Why isn’t it happening?

  6. Hernando da Silva

    Australia is not going to fix the structural problems with our economy – we will just pivot from China to India to keep our mass migration economy pumping.

    • ErmingtonPlumbingMEMBER

      A truely “Multicultural” immigration program focused on diversity would have no single country providing more than a small percentage of our yearly intake.

      • Absolutely, getting too many people of one category means they start to dominate and change the place. Australia means “Little Italy” and “Little Saigon” and all the others, all under the great big Australia banner … not dominated by one migrant group. “We are one but we are many” … definitely a National Song if not the Anthem.

        • ErmingtonPlumbingMEMBER

          I hole heartedly agree.
          A Universal Australian cultural identity taken up and proudly owned by our ethnically diverse population is far preferable to a country Balkanised into cultural enclaves that have little solidarity or connection to each other.

      • Hernando da Silva

        An excellent point. Many US visas have limits that no more than 7% of migrants can come from any one country.

        This forces the migrants to assimilate local values, rather than forming enclaves. We currently have 1.2 million migrants born in mainland China. A huge fifith column if ever there was one.

  7. Jumping jack flash

    Well said.

    The solution: Solve the debt problem and set up state-owned industry. Don’t necessarily manufacture military items, although these are easily justified.

    The one and only proven way to pull countries from depression.

    Take away the thin veil of debt growth and we are in the deepest depression that there ever was.

  8. “Australian jobs and prosperity rely on open, rules-based trade, not retaliatory, tit-for-tat measures.” ……. so Madeleine King does actually understand what a pack of manipulating, thieving, lying plicks, mr. chyny is now !!?

  9. Australian Society has become too unstable for Business environments to Thrive. Real Estate is trashing the joint.

    Who in there right mind would invest Time or Money into a Thriving Australian Enterprise at this time with all the changes going on?

  10. Australia is beyond stuffed.

    China many steps ahead of Australia they’re just doing us slowly because there needs to be some sport in this.

  11. constantly amazed about some MBers’ ability to turn any issue into one of white male disenfranchisement Because Women.

  12. I’m interested to see if this is partially a CCP attempt to position Fitzgibbon for a leadership challenge. China stooge that represents the coal heartland would be ideal replacement for the empty chair as far as the CCP are concerned.

  13. Hey I got an idea, as the LNP love to outsource & privatise everything how about they outsource their economic policy to Labor then we can have the best of both, strong against China corruption & interference in internal affairs but the needed economic reform to make us great again.