Fiddling While It Burns

Painted Into a Corner | 09/07/2009

Things have gotten crazy with China.

Wait... what happened? Photo: AAP/ Dave Hunt, via ABC.

Wait... what happened? Photo: AAP/ Dave Hunt, via ABC.

The Rudd government has faced criticism for its close relationship with the Chinese government from the start. Kevin Rudd’s facility with Mandarin was an important factor in making him look like a modern alternative to the Sino-phobic John Howard in the 2007 election, but in government it was clearly a double-edged sword, with the Coalition quickly implying that Labor’s loyalties might lie a little too close to Beijing. It first became an issue through Joel FitzGibbon’s foolishness, and has been potential political dynamite, particularly when it comes to state-owned Chinese companies buying Australian mines.

Look at this photo. It is a truly great photo. You can see in (Australian Foreign Minister) Stephen Smith’s eyes that he suddenly sees exactly where everything is going.

From the ABC:

Detained Rio exec accused of spying

Foreign Affairs Minister Stephen Smith has revealed that an Australian employee of the mining giant Rio Tinto has been arrested in China on suspicion of spying.

It seems – seems – like this is some sort of fit of pique on behalf of some part of the Chinese government, a retaliation for the rejection of advances to buy a stake in Rio Tinto.

From The Sydney Morning Herald:

Last month the miner turned its back on a long-running courtship from the state-owned company Chinalco, and is presently engaged in tense iron ore price negotiations.

Barnaby Joyce certainly thinks so – from ABC Radio National’s PM program:

The Nationals leader in the Senate, Barnaby Joyce, says he believes that the failure of the state-owned Chinalco to buy an 18 per cent stake in Rio Tinto could be behind the arrest….

BARNABY JOYCE: Well we know that four of them worked for Rio. We know that they disappeared in Shanghai. We know that they’re held by an arm of the Chinese Government. The reason for them being held, we don’t know. We know that we’re failing to get proper diplomatic access to them, to Mr Stern Hu. And what we can deduct is that there’d have to be a relationship between Chinalco’s failure in its purchase of Rio and the ramifications that go beyond a state-owned enterprise all the way to the Chinese Government.

That all these state-owned enterprises and the Chinese Government itself or the Communist People’s Republic of China’s Government, is one and the same and ramifications to one is ramifications to all.

BRIGID GLANVILLE: So what makes you think there’s a link between Chinalco and its battle to buy a stake in Rio Tinto?

BARNABY JOYCE: Well I suppose I only have to look at the blog sites after the bid failed and to realise and that there was an immense well of feeling held in china. They felt that they’d been personally slighted. But of course even these personal slights are scripted via the Chinese Government and the Chinese Government I think we shouldn’t confuse with the Chinese people. But what we should acknowledge is that the direct ownership of state-owned enterprises by the Communist People’s Republic of China is part of the same plan.

All investments overseas go through a central organising authority to where they’re going to purchase overseas and that the disappearance of these four people, one of whom is an Australian citizen, if it’s nothing to do with Rio, then why can’t we get diplomatic access to them and find out exactly what’s going on.

Australia has always been caught in China’s gravity well to some extent, but the People’s Republic meteoric rise over the last decade became a crucial part of Australia’s prosperity. The choice of the Rudd government (and the more grudging choice of the Howard government) was to embrace this rather than resist it. However, now Labor is learning the disadvantages of a realist foreign policy – that is, if you abandon principle, you are no longer protected by it. When your best friend the expansionist totalitarian empire starts acting like one, no one can feel too sorry for you.

Labor is caught between a rock and a hard place. They must either try and exert some leverage to force the Rio Tinto employees’ release (which would likely fail miserably while causing an enormous and expensive international rift), or do nothing and brave the wrath of an Australian electorate who already thinks they are giving too much ground to foreigners. This incident makes it clear that, no matter how close Labor might consider their relationship with China, the Chinese government is running its own agenda, and will happily run roughshod over their allies in Australia if it suits them.

If you’ve ever had a falling dream, you know the sense of horrible inevitability as you wait for your body to hit the ground. That’s the sensation you’re seeing when you look into Stephen Smith’s eyes.

Of course, there’s always the chance that the four Rio Tinto employees were actually stealing state secrets – a possibility that Stephen Smith will be desperately hoping for right now.

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2 Comments »

  1. I would have expected that the detaining on a flimsy charge of an Australian National would have made headline news, but the media seems more interested in who actually sired Michael Jackson’s children.

    Comment by Marj — 09/07/2009 @ 9:54 am

  2. That gutless, populist Rudd has no idea what to do over this one. He was dazzled by the size of China’s economy, and conveniently chose to ignore the fact that they’re essentially a fascist state. He’s got not position of principal to fall back on at all. He’d sell his grandmother to get elected, and he never saw this one coming.

    I suspect he’ll just try to ignore the problem.

    Back in the real world, companies like Rio Tinto will probably start re-examining the risks of having their negotiating staff set foot in China. I’d laugh my ass of if all of the big miners worldwide simultaneously announced a policy of having all negotiations with China take place in Switzerland.

    Comment by CaptainReality — 11/07/2009 @ 3:42 pm


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