As regards Australia

The Aussies have been in the news lately.   For among other things(all below), many of them apparently disdain Halloween.  More than a few of them seem to think it yet another aspect of American Cultural Imperialism……??  (It’s only Candy and Kids!....btw, what’s a “lollie”?)

Well, the Yanks pushing their sneaky ways upon yet another unsuspecting Culture aside, at least we are more than an arm’s length apart from each other.   Distance tempers annoyance.  Which is more than I can say for Australia and the Center of the Celestial Universe, er-hmm…..China.

Is Australia the proverbial mouse at the foot of the Dragon’s Cave?  I dunno.  But methinks in a generation or two, the Aussies very much are in danger of becoming both culturally and economically dominated by China.  That is, Halloween may be the least of your worries.

This topic has been on my list for quite awhile, and with the news that Australia is on the verge of signing a Free Trade Agreement with China, let alone doing a lot of other things with the Heavenly Kingdom, I couldn’t help but wonder how Australians themselves feel about their impending and inevitable relationship with Uncle Xi. 

As an outsider looking in, I wonder if this is a relationship that can be sustained on an equal basis?   

Or is Australia even aware of the inevitable? 

I’m not saying Australia’s flirtation with China is inevitable-uh wait, I guess I am saying just that.  

The problem with China is eerily similar to the girlfriend that won’t let go.    Every country within the Pacific Region is nothing but a wandering butterfly to be sucked into the Black Hole we call China.  If China discovers a “need”, you’re “done”.   China will get what it wants, either this generation or next, but it will happen.  And Australia, you are probably gonna be a “First Member” of the New Chinese Family.  It’s not your fault mind you.   So let’s take a look at how Australia both economically and socially is interacting with China.

First, let’s talk People:

Australia’s population is surprisingly small.   Like Canada, we Americans just don’t know very much about Down Under.  It’s unfair that Australia only makes the news when a surfer is killed, or people realize Xmas is during their summertime. (Skiing in June?)

Australia’s population is approximately 24 million STRONG.  

America’s of course is abt 320 million.  So Australia’s population is about the size of a say metro Shanghai or Chongqing. 

What about the Chinese in Australia? By Ancestry there are abt 1 million Chinese that live in Australia with abt one third of those actually born in Mainland China.    Still, that makes up abt 4% or so of the Aussie population.   Let that sink in a minute.  I’m guessing that’s probably Australia’s largest ethnic group amongst migrating countries.

As for America…the Chinese descent population is about 4 million people, or barely 1% of the population.   Still, this is a kind of misnomer, as while the Chinese population has only taken off over the past few decades with the advent of 改革开放, some of America’s oldest citizens are the Chinese.  They can trace their heritage in America back to the 19^th century, with the advent of the railroad, the Western portion of which, the Chinese built.

The main difference though between Australia and America in terms of the inevitable influence of the Chinese is again geographic.  China has a history of economically dominating its Host Country.  The Malay, Filipino and Indonesian economies all claim a substantial portion of their GNP as being dominated by ethnic Chinese within their respective country.  Only the advent of the Communist Party in Vietnam diluted the influence of the Chinese there.  And let’s be honest:  no one would claim these former countries to be very industrious by Chinese standards.   Indeed, being a “laid back” society is your death knell should you be a target of Chinese immigration.

The Chinese will probably never dominate the American economy.   It is too open, with too many competing demographic segments.   America is also an endless pipeline of both legal and illegal immigration from Latin America.  (Canada loves us)   And of course we have our legacy issues(slavery), ie the 15% or so of America that is Black.  

Australia lacks all of the above.  Surrounded by water, it has been able to maintain its ethnic mix relatively intact, which makes the % of Chinese in Australia all that more impressive.  For example, what would Australia look like if it had a land border with Malaysia or Indonesia?

Yet with Australia’s proximity to China, vis a vis the United States, it makes sense that there is a large % of Chinese in Australia.  Indeed, I’d think 4% as only the beginning.  One must not think in terms of absolute numbers, rather in ratios.  Unless Australia was to initiate some type of immigration controls, one would think the Chinese population will continue to skyrocket.   And as I’d written recently, that is not necessarily a bad thing.  

Corruption( a future post) is in effect both benefiting America, Australia, and every other country a wealthy Chinese chooses to send his money too.    It props up real estate, and luxury goods spending. 

It helps the host countries’ economy. 

I don’t think it’s so easy for Australia to clamp down on its growing Chinese population, however.

What is the economic influence of China on Australia?

What is the size of Australia’s imports from China?  

Australia buys $35 billion usd annual worth of imports from China.

What abt the size of America’s imports? (Brace yourself!)

425 billion usd annual….it’s huge but I guess it’s about right.  As America is over 10 times the size of Australia, the size of American imports from China makes sense as well. 

What are Australia’s exports to China?

$65 billion

America’s? 

$110 billion.  That’s right….pretty small number isn’t it?  Of course, the USA is mostly just buying stuff from American companies that build there(Apple, Wal-mart,etc).  Still, America, with an economy 15 times the size of Australia's, only has double the exports.  How's that for Chinese National Policy?

So how big is the Australian economy?

Australia has a GDP of $1 trillion.  So Aussie-Chinese trade is abt 10% of Aussie GDP.   

If you ask me, that’s a big fucking deal.  In short, by any stretch of the imagination, when 10% of a Nation’s overall GDP is with ONE country, how can you not be worried?  Does anyone think that 10% ration will not increase?   One wonders what it will be within a Generation? Two?

It puts a premium on Aussies and their ability to manage this growing relationship, without becoming dominated by it.

As Australia’s exports are mostly natural resource related, couldn’t China put a big dent in Australia’s economy by buying the same natural resources from somebody else? 

As Australia’s trade with China grows, any reduction in that trade would of course put Australia at risk.  Does Australia plan on diversifying?

America’s GDP is $19 trillion.  While China is our 2^nd largest trading partner, it’s still only 3% of our total trade.(kinda blows up the myth of US reliance on China, doesn’t it?)

China’s GDP is $16 trillion.  With a population of 1.3 billion(or so).   Remember, Australia’s is approx. 24 million or so.  How can you not be dominated by China?  (are you still worried about Halloween?)

Australia is now abt to conclude a Free Trade Deal with China.  Good for Australia…..and Bad for Australia. Take it from the States’….Free Trade Agreements are nothing but a massive transfer of wealth from the richer country per capita to the poorer country.  The world gains.   The CEO’s of companies gain, but the middle class of the nation with the highest per capita income loses out.  

All a FTA does is make it easier for companies to ship jobs overseas to the poorer country.  That’s it.  And as that company saves money, and thus becomes more profitable, the Sr Mgt of that company itself makes more money, whilst at the same time disposed of local workers get sent off for “job training”.

With such a “DEAL” as this, any wonder the US Middle Class is dying? 

If Australia thought 10% was a big number, wait until that FTA kicks in. 

So what’s the Big Deal?  Why does the West care so much about how Australia and China get along?

Race.  Pure and simple, Race.  It’s ok for China to economically dominant other Asian nations.  After all, their “lazy”, and “backward”.   They are ripe for the picking.  But for an Asian nation to economically call the shots on a Western nation….well, that’s a akin to Japan defeating the Russian Navy at Tsushima.

There is no precedent.  People see how China treats Africa, and wonder if the same would happen to them?  Now China wants to create a special Asian Investment Bank.  It has asked Australia to join, but the Aussies have demurred.  This may be the last time Australia turns down a major overture from China.

In short, China finds the demands of institutions such as the World Bank as too onerous.  (You know, attaching environmental conditions such as “don’t destroy the forest when building a factory” is nothing more than “acting White”.)   A bunch of countries with the bad luck to be on China’s border have of course joined.(wouldn’t you?)  While the Bank has good intentions, and may actually be needed as an alternative source of funding for poorer countries, what it really hopes to achieve is diminishing the Influence and Power of the West within Asia.   Though it would seem rather awkward for Australia to join, if it were to do so, it would be a major coup for China. 

Anyone half paying attention in Asia should realize by now it is China’s ambition to not only drive a wedge between America and its Allies, but to establish itself as the premier player in Asia.  Thus Australia is caught in the middle.   For how long can it hold out? One generation?  Two?

What will the tipping point be?  I’d say those pesky kids wanting candy are the least of your worries.