Tuesday, 9 November 2010

China, Australia and the US: the crunch is coming

Australia faces a major dilemma in its relations with China, as this week's talks with US Secretary of State Hilary Clinton and Secretary for Defence Gates have highlighted.

On the one hand, we depend heavily on China for our prosperity.  But they are a highly immoral regime with no compunction about punishing either its own citizens (including with forced abortions) or other countries (such as the recent illegal trade ban it imposed on Japan, blocking its access to rare earth minerals) for perceived acts against its interests. 

And they are once again making expansionist noises, expanding their military might, and laying claim to the South China Sea.  They seem to be major players in electronic penetration and attacks, as well as more conventional spying methods directed against Australia and the West more generally.

Hence the recent US-Australia announcements of an increased US presence in Australian bases and in Asia more generally.

Australia is currently one of the most economically prosperous countries in the world: where elsewhere the effects of the GFC are still being felt, most particularly in the US, Australia's growth rate remains healthy and unemployment low.  And we are doing it on the back of trade with China, now responsible for 23c in the dollar of our merchandise sales abroad.

But what happens if we 'offend' them?

And can we really have no qualms at all about selling our goods to a country that continues to oppress its citizens so badly?

There has long growing concern for some time about the unresolved tensions in North Asia, with China, North Korea and Japan in particular all in the mix.

Good to see some signs of our Government taking at some strategic action on this front.  And to see the US back in the game, instead of pretending to delegate to its Australian 'sheriff'.  Maybe Chairman Rudd can finally do some good in his new niche as Foreign Minister.  But don't hold your breath for action on the economic front - short-termism always wins in Australia, until the crash comes...

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