Will China end up owning the World?

[Smurf1976]

It's a shame yeah. "You Canner Hand A Man A Grander Spanner" , no longer true ...

A lot that comes down to those at the top.

There's an inherent value in manufacturing and other "hands on" technical things that those who've never been involved just can't understand. It forces all manner of innovation to improve product and overcome problems and that's true of even relatively basic manufacturing facilities.

Trouble is, our corporate boards and governments are filled with people having literally zero such experience. They just don't get it and thus see the value of manufacturing as being nothing more than that of the goods produced less the cost of raw materials.

A problem those on corporate boards etc don't grasp is best explained by pointing out that back when I was a boy, pretty much every tradesman and home handyman in Australia owned the exact same screwdriver set which was manufactured in Moonah (Tas). Those old enough know the one - the flat blade were yellow, philips were green, insulated was red.

That factory is long gone now and whilst the product still exists, you'd be hard pressed to find anyone using it indeed you'd have some trouble finding somewhere that even sells those tools today. All made in China and they've lost the point of difference of being a 100% Australian product as they once were.

There are many such examples where a company had extremely strong loyalty to its Australian made product but fell into irrelevance once production was moved offshore and the "buy local" reason to choose that brand over a competitor ceased to exist. The companies didn't simply offshore production, in many cases they put themselves out of business in doing so.

Therein lies a key problem with both politics and the management of businesses. Static accounting. Assuming that changing one thing (eg location of production) won't affect other things (eg consumers' willingness to buy the product). Very often that's not even remotely close to the truth - change the location of production and that removes the reason to buy the product over a competitor also made in China.

 

[IFocus]

Smurf I still have a complete set of those screw drivers some a little worse for wear particularly the red insulated one.

Neoliberals and letting the market determine the out comes has led us to this point its pretty much as simple as that, ideology has determined our future not carefully thought though considerations as you point out.

Unfortunately that will also determine the way forward.

 

[sptrawler]

It is a shame the trillions of dollars in Australian super funds, can't be used to buy Australian assetts like the Westconnex freeway, apparently I read there are only three overseas companies interested in buying it.
I guess the Australian super funds just want their management fees for passive investment.

NSW government to sell remaining WestConnex stake

The cash-strapped NSW government will sell its remaining stake in the multibillion-dollar WestConnex motorway.

www.smh.com.au

 

[sptrawler]

Neoliberals and letting the market determine the out comes has led us to this point its pretty much as simple as that, ideology has determined our future not carefully thought though considerations as you point out.

You are spot on IFocus, the Labor Party was full of them in the 1980's.

Neoliberalism is contemporarily used to refer to market-oriented reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers" and reducing state influence in the economy, especially through privatization and austerity.

Holden's demise started with the Hawke government

Holden's demise as a car maker in Australia pre-dates last September's federal election by 29 years and some months.

www.smh.com.au

And then the Liberals in the 1990's

Neoliberalism is contemporarily used to refer to market-oriented reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers" and reducing state influence in the economy, especially through privatization and austerity.

The Death of Telstra

There might be better places for your investment… Telstra (ASX: TLS) is one of the most widely – and most …

www.fool.com.au

That's why it is so difficult to pick sides.

 

[sptrawler]

A balanced article, on where Australia finds itself with regard China and the rising tension.

Australia's once-symbiotic relationship with China is over

Australia's biggest export could become a key geopolitical weapon amid rising tensions with China, writes business editor Ian Verrender.

www.abc.net.au

 

[SirRumpole]

I saw on Insiders this morning that China was objecting to our barley exports because they were irrigated and irrigation was supplied by the taxpayer and was therefore subsidised.

How absurd !

Even if its not true, every company in China is owned or controlled by the State and is therefore subsidised.

And is China objecting the the subsidies that US farmers get from their government ?

Why do we allow ourselves to sign these ridiculous one sided contracts ?

We have to be the most stupid country in the world.

 

[SirRumpole]

A balanced article, on where Australia finds itself with regard China and the rising tension.

Australia's once-symbiotic relationship with China is over

Australia's biggest export could become a key geopolitical weapon amid rising tensions with China, writes business editor Ian Verrender.

www.abc.net.au

Just put a 20% export tax on iron ore , we should have done it a long time ago regardless of 'trade tensions'.

 

[sptrawler]

I saw on Insiders this morning that China was objecting to our barley exports because they were irrigated and irrigation was supplied by the taxpayer and was therefore subsidised.

How absurd !

Even if its not true, every company in China is owned or controlled by the State and is therefore subsidised.

And is China objecting the the subsidies that US farmers get from their government ?

Why do we allow ourselves to sign these ridiculous one sided contracts ?

We have to be the most stupid country in the world.

This could well be a defining moment for Australia, short term pain for long term gain, will be the order of the day IMO.
There is no easy answer to the situation we have found ourselves in, IMO it is better to face it now while we still have some bargaining power, than down the track when we have no resources to leverage from.
As we have said on here globalisation is blown to bits and China is making it worse IMO, the rest of the world will have to return to a more protectionist model and increase their manufacturing and material processing.
Just my opinion.

 

[satanoperca]

This could well be a defining moment for Australia, short term pain for long term gain, will be the order of the day IMO.
There is no easy answer to the situation we have found ourselves in, IMO it is better to face it now while we still have some bargaining power, than down the track when we have no resources to leverage from.
As we have said on here globalisation is blown to bits and China is making it worse IMO, the rest of the world will have to return to a more protectionist model and increase their manufacturing and material processing.
Just my opinion.

Don't know if this is correct but do correct me if I am wrong.

Old adage in business, never put your eggs in one basket (China).

Why have companies chosen to do the majority of their trade with one Communist country?

Because they have purchasing volume and my understanding is they pay top price.

Diversify Australian suppliers, or all those eggs in a single basket, might just get broken.

 

[bellenuit]

Old adage in business, never put your eggs in one basket (China).

Why have companies chosen to do the majority of their trade with one Communist country?

I think this can be a dilemma for business. If a company exports a commodity, say 10% to USA, 10%, Europe, 10% rest of Asia and 70% China, then one cannot simply say let's change that mix to 25% to each of those regions. There may simply not be the demand from those other regions to absorb what isn't sold to China. The only way to get the mix right might be to simply reduce what is being sold to China so that it gets no more than say the average of the other regions. But how do you persuade a company not to sell when there is a customer there willing to buy it. It would certainly require intervention at a federal level as there is no incentive for a company to limit sales. Federal intervention then bings up other issues. For example, are we deliberately stifling China's growth? It would be quite easy for China to play the racist card. I am not saying that we should not lessen our reliance on China, just that how one does it is fraugth with difficulties.

I agree with sprawler in that this is a defining moment for us and we need to accept short term pain. There seems to be some support for us (hopefully more than just sympathy for us) coming from Europe, particularly Germany, regarding our predicament and they have expressed low level condemnation at China's heavy handed tactics. Should that support begin to grow and other countries pull back from their reliance on China then there is some hope that pressure may mount in China against Xi, who appears to be the one who decided now is the time to play his cards on issues like HK, Taiwan, the South China Sea, the Uyghurs and anyone questioning the origins of COVID-10 or criticising China's response to it.

 

[SirRumpole]

I think this can be a dilemma for business. If a company exports a commodity, say 10% to USA, 10%, Europe, 10% rest of Asia and 70% China, then one cannot simply say let's change that mix to 25% to each of those regions. There may simply not be the demand from those other regions to absorb what isn't sold to China. The only way to get the mix right might be to simply reduce what is being sold to China so that it gets no more than say the average of the other regions. But how do you persuade a company not to sell when there is a customer there willing to buy it. It would certainly require intervention at a federal level as there is no incentive for a company to limit sales. Federal intervention then bings up other issues. For example, are we deliberately stifling China's growth? It would be quite easy for China to play the racist card. I am not saying that we should not lessen our reliance on China, just that how one does it is fraugth with difficulties.

I agree with sprawler in that this is a defining moment for us and we need to accept short term pain. There seems to be some support for us (hopefully more than just sympathy for us) coming from Europe, particularly Germany, regarding our predicament and they have expressed low level condemnation at China's heavy handed tactics. Should that support begin to grow and other countries pull back from their reliance on China then there is some hope that pressure may mount in China against Xi, who appears to be the one who decided now is the time to play his cards on issues like HK, Taiwan, the South China Sea, the Uyghurs and anyone questioning the origins of COVID-10 or criticising China's response to it.

We are just sucking up China's mendacity at the moment.

As a former PM said, you don't stop bullies by giving in to them.

At the least we should be suspending any further investment by China in any of our industries and putting an export tax on iron ore.

It has to end somewhere, China won't stop while they think they have us over a barrell.

 

[sptrawler]

One wonders if China isn't setting Australia up for a big fall? We import most of our consumables from them, they don't need our business so could quite easily withdraw exports to Australia, they import our raw materials but we probably are more dependent on them buying it than they are as to needing it.
Really interesting times, when we started down this road of deregulation and tariff reductions, I wonder if those who championed the ideology realised the precarious position it would put us in.

 

[SirRumpole]

One wonders if China isn't setting Australia up for a big fall? We import most of our consumables from them, they don't need our business so could quite easily withdraw exports to Australia, they import our raw materials but we probably are more dependent on them buying it than they are as to needing it.
Really interesting times, when we started down this road of deregulation and tariff reductions, I wonder if those who championed the ideology realised the precarious position it would put us in.

Nope they just wanted the money.

I think it's a pretty good lesson for other countries( and States), especially those who have signed up to the Belt and Road.

 

[satanoperca]

they don't need our business so could quite easily withdraw exports to Australia, .

Who cares, so what, do they export shelter, NO, do they export food, NO, do they export fresh air, NO, do they export water, NO, they do export clothing but so do a stack of other countries;

So what does China export to Australia that we need to survive: f----k all of nothing.

Edit, they do export a crap load of sh----it that we put in a landfill.

 

[sptrawler]

I think it's a pretty good lesson for other countries( and States), especially those who have signed up to the Belt and Road.

It does make one think, the idea of excluding Huawei from their 5G infrastructure, may well be a very sensible move.
China's current attacks on Australian trade, does show that contracts with State run organisations, are very much at the whim of the State and contracts and safeguards mean very little.

 

[satanoperca]

It does make one think, the idea of excluding Huawei from their 5G infrastructure, may well be a very sensible move.
China's current attacks on Australian trade, does show that contracts with State run organisations, are very much at the whim of the State and contracts and safeguards mean very little.

What is the difference between buying a nuclear missile from China or a 5G network?

Nothing, both can be armed to distroy.

 

[sptrawler]

Who cares, so what, do they export shelter, NO, do they export food, NO, do they export fresh air, NO, do they export water, NO, they do export clothing but so do a stack of other countries;

So what does China export to Australia that we need to survive: f----k all of nothing.

Edit, they do export a crap load of sh----it that we put in a landfill.

Very true and I agree with you, as long as the muppets don't revolt, when they can't get their retail therapy. lol
At least China will have to probably go back to melamine baby formula.

 

[sptrawler]

What is the difference between buying a nuclear missile from China or a 5G network?

Nothing, both can be armed to distroy.

Well if you can't see the difference between buying a missile, or buying critical infrastructure and software that could remotely shut down your internet and communications nationwide, I guess we just see it differently.

 

[satanoperca]

Well if you can't see the difference between buying a missile, or buying critical infrastructure and software that could remotely shut down your internet and communications nationwide, I guess we just see it differently.

I am confused, you agree or disagree, that both can be used to create destruction/harm.

 

[sptrawler]

Buying a misile can do a bit of damage, shutting down your internet and comminications, stuffs up your whole country these days.