China has always been adept at playing the long game.
China has always been adept at playing the long game.
NOT long after Premier Colin Barnett returned from his recent whistle-stop China trip to rescue the Oakajee project, a new rumour started doing the rounds.
It claimed the Chinese came across ‘a bit heavy’ at their first meeting with the premier.
One source said the Chinese complained they hadn’t been accorded the type of friendship someone doing so much trade could expect.
Mr Barnett listened respectfully to those unexpected complaints, but left China somewhat taken aback by such behaviour.
Clearly the Chinese are expecting something more than just businesslike engagement, although precisely what they’re seeking remains difficult to fathom.
But a hint may have come during July’s Boao Forum for Asia Conference in Perth, where Beijing’s favourite Western Australian, Perth billionaire Kerry Stokes, ardently advocated embracing China.
According to a report in his newspaper, The West Australian, after addressing the conference ‘passionately’ he suggested a special relationship with China.
“If we don’t integrate our cultures and become close and accept the Chinese, then it will be to our peril,” he said.
Mr Stokes has sizeable investments in China, including an English language newspaper, a $250 million stake in the Agricultural Bank of China, and the Caterpillar franchise, so has an incentive for promoting whatever it is Beijing is seeking.
Maybe Mr Barnett could ask Mr Stokes to clarify precisely what Beijing wants.
In the meantime it’s worth considering this question independently.
And when doing so it’s worth keeping in mind that Australia’s two regions of longstanding cultural and other contact – Europe and the US – are increasingly indebted to, and therefore dependent upon, China.
China is believed to hold about $1 trillion worth of US Treasury bonds and the European Union’s Greek rescue plan is seeking Chinese funding to rescue its various banking sectors.
French President Nicolas Sarkozy even said Beijing had a major role to play in plans to boost the European Financial Stability Facility (EFSF) to €1 trillion to help support the EU’s ailing financial and banking sectors.
Furthermore, Klaus Regling, the EFSF’s chief executive, even visited Beijing, like Mr Barnett a month or so earlier, to discuss the terms of such support.
Was he perhaps also lectured?
Countries in need are turning to China because its foreign exchange holdings are a whopping $3.2 trillion.
They’ve reached this height since China’s late paramount leader, Deng Xiaoping, gave the all clear in 1979 to modernise.
A third of a century later, China is well on its way to being lender and backer of last resort for both the US and Europe.
And this comes as Australia, particularly WA, seeks ever-greater involvement with China, like the Oakajee venture.
What shouldn’t be forgotten is that when one is solvent – as the US was for half a century after emerging victorious from World War II, and the UK prior to the Great War – military and diplomatic power generally accompanies it.
Soon after the GFC, the Financial Times’ ‘China Confidential’ carried a brief article under the byline Andre Pachter, which contended that China’s rulers had come to view the US as another Rome.
China Confidential is a website carrying anonymous and pseudonymous reports to “protect sources and preserve freedom of travel to and from mainland China” and is regularly quoted by the BBC and The Wall Street Journal.
Pachter began by claiming Beijing’s ruling elite had reached a “startling consensus concerning the world’s political future”.
He said this included two strands.
First, the US should be seen as a dying but still dangerous ‘Hegemon’, a modern-day version of the ancient Roman Empire in its declining years.
Second, Europe was increasingly a politically irrelevant collection of weak states.
Wall Street’s 2008-09 near collapse was seen as a turning point in long-standing Euro-American global dominance, the origins of which dated back to Christopher Columbus’s epic 1492 voyage that would link the destinies of the old and the new worlds – Europe and the Americas.
European penetration, colonisation and exploitation of the Americas were seen as the uplifting events for Europe’s feuding monarchies, which were put finally on the road to unity with the defeat of Nazi Germany in 1945 and the collapse of the Soviet Bloc in 1990.
But this 500-year-long Euro-American global dominance cycle, which even extended into China’s immediate vicinity via military and other treaties with Japan, South Korea and Taiwan, was ebbing.
“China sees Europe not as a power, but as a market,” Pachter said.
“A European Union in name only – from China’s perspective, the old Common Market name is more fitting – it is certainly not a serious rival to either China or the US for international influence and prestige.”
He said China’s People’s Liberation Army, in particular, was convinced Europe would be overwhelmed and irreversibly transformed by its Muslim minorities, especially if Turkey’s bid for EU membership, which US President Barack Obama endorsed, eventuates.
“In contrast with Europe, the US clearly has a long way to go before it is Islamised.
“In terms of importance, Detroit, for example, can’t be compared with Londonistan.
“But Beijing ... believes that the continuing Muslim influx into the US and rise in Muslim supremacist groups, combined with the ceaseless flood of illegal immigrants from Latin America – capable of turning overnight into a human tidal wave if Mexico collapses into chaos and anarchy – will eventually overwhelm and ultimately bury the Hegemon.
“Chinese Communist Party economic advisers also believe the US economy is doomed as a result of years of hollowing-out and outsourcing, incapable of being revived without a radical restructuring. A slow death is foreseen; hence, the need to diversify out of the dollar in an orderly fashion – without killing China’s stake.
“China’s military strategists are said to be convinced that the US is dangerously vulnerable to asymmetric warfare, including Islamist terrorist attacks. Another mega-attack, the Chinese believe, could be fatal for the US.
“Several Chinese asymmetric warfare experts believe it is only a matter of time before the US is hit by nuclear terrorism.”
The report’s conclusions certainly looked credible, not least because China has traditionally viewed the past in cyclical terms.
Chinese historians viewed their culture’s long past in what they call ‘dynastic cycles’.
Dynasties displaced collapsed predecessor dynasties.
They could be long lasting, even exceeding 400 years, like the Han Dynasty (202 BC-220 AD).
Good governance would prevail for a time until corrupt and wasteful practices emerged.
Europe’s and the US’s teetering banking sectors, mounting debt, overspending, huge growth in welfare and other transfer payments, and bureaucratic expansion are thus seen as evidence of a historic turnaround.
WA may well be seen as a mere outpost of once-vibrant Europeanism that, as Mr Stokes urged, should now integrate into a nearby culture.
Hopefully Mr Barnett recalls his 2011 China trip when he moves to complete that book he’s begun writing, which he said would be titled ‘The Black Swan’.
It would be nice to learn in a chapter titled, say, The Swan and the Dragon, how well his China-Oakajee talks related to that Stokes warning.
