China will save us again.

Recently the mainstream media (MSM) has been whipping itself into a frenzy over Prime Minister Kevin Rudd’s apparantly “too cozy” relationship with the Chinese Government.

Firstly, we had Rudd’s conversations in fluent Mandarin with Chinese leaders much to the chagrin of his Liberal Party counterparts who, by comparison, would struggle to order Yum Cha in Haymarket.

Mr Rudd’s familiarity with Chinese culture and in particular his fluency in Manadrin should not be underestimated. Such things are greatly appreciated by the Chinese and will prove a tremendously powerful ingredient in building and strengthening our future ties with this emerging superpower.

Mutual respect, maintaining “face,” diplomacy and the way in which China “does business” are things that Rudd understands.

In contrast, the gobsmacked and floundering Liberals, sought to pick holes in Rudd’s familiarity with the Chinese “Modus Operandi.”

We had reports of the “mysterious Chinese Businesswoman” funding overseas trips – which soon disappeared from the headlines, and more recently fearmongering over China’s military build-up – while Australia prepares to do exactly the same thing.

As America’s economy goes down the toilet, there is little wonder that China is readying itself against any external threat.

Arguably, China will soon emerge as the world’s major economy. Personally, I believe the collapse of the financial sector and the US economy has been the tipping point in this respect.

Reserve Bank Governer Glenn Stevens has also signalled the important role that China will play in rescuing Australia from our economic doldrums.

According to The Australian, the Mr Stevens has refreshed the prospect that traditional safeguards of China and commodity prices will lead Australia’s recovery from recession in the next year.

The bank met the expectations of the financial markets yesterday by leaving interest rates on hold at 3 per cent despite some economists expecting a 25-basis-point cut.

The RBA has cut 425 basis points from the official cash rate since September last year, taking rates from a peak of 7.25 per cent to the current rate, which is a 50-year low.

The majority of economists expect rates to be pared back to 2 per cent before the end of the year, but the RBA indicated future reductions would not necessarily be automatic.

In a statement, RBA governor Glenn Stevens said the Australian economy and the world economy as a whole were front-loaded with stimulus through the co-ordinated rescue package led by the G20.

“The global economy contracted further during the first few months of this year. While the near-term outlook remains weak, there are further signs of stabilisation in several countries,” Mr Stevens said.

“The Chinese economy in particular has picked up speed in recent months and many commodity prices have firmed a little.

“The considerable economic policy stimulus in train in most countries should help contain the downturn and support an eventual recovery.”

The Australian dollar strengthened on the rates decision, given that the move to stay on hold maintains the differential between Australia and US, where the official interest rates are virtually zero.

The currency moved from US73.80c up to US74.20c before it was sold off slightly. At the local close it was at US73.96c.

The interbank futures market is now tipping that rates could stay on hold for the rest of the year.

UBS economist George Tharenou said the RBA’s emphasis on China showed the central bank thought the return of the world economic superpower could propel Australia’s prospects in the next few years.

“We think the RBA is seeing some signs of the outlook improving globally and stability in several places,” he said. “They are placing more weight on China given our trade experience and they are seeing improvement in commodity prices.

“There are signs China is picking up and if there is the same pick-up in commodity prices then that would give a direct boost to the income side of the Australian economy.”

So it seems, that Australia’s future prosperity will once again depend on our relationship with China, and its future growth and development.

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11 Responses

  1. Just a small point on clarity, Reb, if I may:

    In this morning’s two posts you have combined your own editorial comment with quotes from outside sources, without any clear separation between the two. It would be a great help, to me, at least, if you could utilise the blockquote feature or something similar when outside sources are cited.

  2. The thing that mildly irritates me about the so called ‘Rudd-China’ relationship is how many in the Canberra Press Gallery seems to take the inane assertions by the Opposition that Rudd is too close to China etc. as a ‘problem’ without any analysis.

    The shortcoming of this was shown when the Defence White Paper was released and the Opposition said that ‘the government has a paranoid obsession with a rise in China’s military strength.”.

    So what is it? Is Rudd cosy or fearful about China?

  3. Noted, and fixed thanks Tony.

  4. So what is it? Is Rudd cosy or fearful about China?

    Rudd doesn’t fear China, but the US does, and as we all know we must always take the pro US position, even if it means that the White Paper is at odds with the official Defence view.

  5. If the Yellow Peril really do pull our fat out of the recessionary fire that’s going to cause a few red-faces (no pun intended) in the Opposition.

    I mean, by the Tory play-book these Commos are supposed to be a threat to our way of life, aren’t they?

    So WTF are they doing saving it?

  6. Evan

    I reckon the Libs are having a serious identity crisis.

    Howard hated Asians, and soon realised there were votes in pandering to the rascist mob when Pauline Hanson came along.

    All the good work that Keating did in building relationships with Indonesia was quickly unravelled by Howard and his motley crew.

    Quite simply they no longer know what they stand for.

    Talcum actually seems to be quite moderate, but is being undermined by the likes of Crazy Eyes and Hockey who once again want to play the rascist card with boat people and so on.

    Thankfully, it seems like the electorate isn’t really buying into their hate-filled venom anymore, as evidenced by that fact that they were unceremoniously booted out of office at the last election.

  7. I haven’t had the time due to family home so say much about the current White Paper but it has some very very interesting turn-arounds from the emphases of the previous government.

    For staters, an emphasis on defence of homeland compared with JWH’s boy’s own adventure which included Abrams tanks which are too heavy to cross most of the bridges in the Northern Territory.

    Then on the diplomacy scene, recognition that China is a rising power and that America’s power is waning. Amazing stuff for a White Power. I am certain as per KittyL that many in Defence will be appalled at a seeming ‘withdrawal’ from a cheek to jowl alliance with the USA, but bad luck..this is the new world order.

    I am sure that if it was up to Defence bureaucracy that they would being saying WW2 that the Japanese would be easily defeated because all Japanese have bowed legs and are short sighted.

  8. I always found it worth a chuckle how the Opposition were very pursed lips about Rudd’s ability to speak Mandarin. This threw into chaos the very very ancient Liberal Party mantra that Labor working classes were ‘envious’ of the the upper classes viz their wealth and their education. [You too if you tried hard enough could rise above your station and send your children to private schools]. I think that we still have some residues re funding for private education and handouts for the wealthy.

    The whole class envy thing is most definitely skew-whiff due to Kevin and Therese.

  9. According to the Libs, Rudd’s ability to speak Mandarin means that he can more effectively communicate with/sell us down the river to China, which is our Enemy/Our Friend, who is going to destroy our way of life/save us from the recession.

    Hmmm.

    What’s the definition of schizophrenia again?

  10. The foundation maxim for diplomacy is that no country has permanent friends of permanent enemies, just permanent interests.

  11. Opps. Above was meant to read “permanent friends OR permanent enemies, just permanent interests.”

    To that end, Turnbull’s speech last week made the important point that Australia’s exports to Japan today are of greater hard-currency value than all our exports to China, India and The United States combined.

    Beneath the ugly efforts of the usual hard-right suspects, lurk big questions of balance and strategy.

    Something Australian foreign and trade policy is defficient in today. Why are we appearing to put all our eggs in one basket? It makes no sense. We should do business with the maximum number of countries possible.

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