Sun Tzu and the art of phony war

Recently, we discussed whether or not Australia was under attack by China.

My conclusion was that, regardless of whether or not either party wishes to admit it, in a very real sense we probably are.

If one accepts that hypothesis, there are a range of common sense actions that should follow, at the very least, to prevent the status quo from deteriorating further and to reduce the risk of further hostile actions.

The problem, quite common in western democracies, is the election cycle tends to reward politicians who practice realpolitik, rather than taking a more principled approach to hostile foreign powers.

An example of this can be seen today with many on the Remain side of the Brexit debacle; the evidence is overwhelming that the EU negotiators have not been operating under good faith (an example is the use of the Good Friday Peace Agreement as leverage), yet many of the key players in the British parliament are behaving as if Micawberistic optimism will win the day. To suggest we’ll get a deal after three years of being told non and nien makes something will turn up seem almost pragmatic and sensible.

But we shouldn’t be surprised. Flying back from Munich with worthless pieces of paper only to have to say, “bugger it” and open up the armoury the following year is in the British national DNA. 

Australia’s too, it would seem.

The Lucky Country’s peace for our time moment seems to be playing out currently with barely a day going by without another story emerging about inappropriate Chinese state influence in Australian domestic politics.

Before we continue, there are a couple points to be clarified:

  1. When I refer to “the Chinese”, I’m referring to the state government and its agents, not the ethnic identity.
  2. It’s my belief that there’s very little distinction to be made between the Chinese government and large Chinese corporations. They may be nominally privately-owned and independent but, if you believe that to be true, I’ve a terracotta army I’d like to sell to you. 

I wish to present four pieces of evidence supporting my position that we are not dealing with a good faith actor when we do business at a national or corporate level with the Chinese:

  1. China believed to be behind hack of Australian National University.
  2. “State actor” believed to be behind hack of Australian national parliament computers (ok, it doesn’t name China but we all know who they mean). 
  3. Australian MP bribed by Chinese businessmen.
  4. Ex-pat Chinese government party member, now an Australian MP, can’t recall ever being a member….. for 12 years.

Bill’s Opinion

It’s not the fact these things have happened and are continuing to happen, it’s the dog that isn’t barking that is most concerning.

Look at the reporting of the statements coming from the various Australian government officials and opposition party leaders. It’s as if China was a synonym for Voldemort.

The most recent incident, for example; it’s a member of the Australian federal government with deep and enduring links to a foreign power, yet the official response is nothing to see here, move on.

It’s almost as if, I dunno, nobody has the testicular fortitude to mention the name of the government that always seems to be interfering in Australian domestic affairs in case, horror of horrors, they take their money away and spend it elsewhere.


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3 Replies to “Sun Tzu and the art of phony war”

  1. You must be saddened by the loss of John Bolton from team China Hawk.

    Ever since the US identified China as its number one threat, the China hawks have courted the people through nationalism just the same as the neocons done with the evangelists. The object has always been to sabotage US-Sino relations and to prevent the rising power of China interfering with the US hegemon, there is no constructive objective at pay here, just relationship destruction. And where US hawks go, Aussie China hawks follow, with comparisons to Germany in the thirties, reds under the beds, pollies taking bribes and spy’s, spying on us everywhere.

    I expect we will see many more sweet and sour nothing burgers being served up in the near term, although Trump may well be the one that throws the spanner in the US propaganda machine that would signal a normalizing of US-Sino relations again and whistling to the Aussie China Hawks to start barking up another tree.

    1. Again, I’m impressed by your uncanny ability to read minds. Yes, I am deeply saddened about Bolton. The entire house is dressed in black and listening to Leonard Cohen songs 24/7.

      Back on planet non-autism, those who follow these things were surprised Bolton lasted so long. Trump has, despite the hysterical claims of Hitlerian intent, proven to be the president least interested in messing around militarily overseas in a generation or longer.

      Instead, he seems to be fighting proxy wars using trade. I particularly enjoy his decision to take on China this way.

      Those who wonder when the trade war will be over might find themselves very disappointed for many years. I’d consider buying stock in manufacturing plants in central and South America as a hedge, as that’s where the trade will flow if Trump wins a 2nd term.

      1. “Those who wonder when the trade war will be over might find themselves very disappointed for many years. I’d consider buying stock in manufacturing plants in central and South America as a hedge, as that’s where the trade will flow if Trump wins a 2nd term.”

        I think that when it comes to patience the Chinese are very good at playing the long game and I would go as far to say are better than the West at it, especially given how long they have waited for the pendulum to swing back to restore them with the title as the world’s largest economy.

        As for manufacturing, the Chinese miracle economy has grown and performed faster than any other economy before it. Whilst China is still the largest manufacturing nation it is necessary for any economy at a certain stage and to mature that it must shed manufacturing, which soon becomes a drag on any modernizing economy. Accordingly, manufacturing has been in decline in China since 2006, as it strives to avoids the middle-income trap and rapidly modernize, China knows that it must become a service and consumption-based economy. This is their economic challenge and they know that manufacturing will have a declining input to their economic future, and if they do not transform then they are economically doomed again. The lower cost Vietnam is a good example of an economy that is at the economic stage that is optimum for manufacturing which is what it is a new manufacturing hot spot in Asia.

        As for investing in South America, that’s a new one on me, I am not sure what basis or fundamentals you would draw that conclusion from, as that would contradict every single undisputed investment megatrend that is unfolding before us. These being the transformation and migration to the mega city, 80% of all GDP growth will come from urbanization and rapid growth of these rapidly growing mega cities. The lion’s share of economic growth will transfer from the developed to the developing world, customer bases will also shift from the developed to the developing world and the epicenter of economic growth will be centered around these future megacities. They will all be in Asia and Africa, none in China, Tokyo will be relegated to a city and there will be no mega cities in the Americas or Europe whose GDP’s will be dwarfed in comparison to these new rapidly growing economies, this trend is discernible and happening now.

        China is by far the most advanced nation in directly investing in these future economic growth centers with their African and One Belt One Road initiatives opening many major economic and trade corridors right through the heart of all the future economic and population growth epicenters. The OBOR could well deliver China with its much sought after new economic growth areas especially in its poorer regions. The US has considerable skin in the Chinese sector with China beings its largest trading partner, a major export destination, and its biggest importer, China also have mega holdings of US treasuries which enable it to keep its domestic interest rates down. It is inconceivable that they would forego this benefit and expose themselves to the economic risk of doing so in the foreseeable.

        For mine and when it comes to investing, I would say that the trend is your friend.

        Investing Megatrend: How Rapid Urbanisation is Shaping the Future

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