Thursday, December 15, 2005

China: Peace Good for Business

China has announced her 15 years’ vision for the Asian region. It’s all very straightforward and simple, and typically Chinese. She wants to get richer – but through trade and not invasions of sovereign nations to steal their oil.

But the vision statement is more than just about China getting rich through trade. The Chinese premier wants peace in the region as this would be vital to her trading activities. She needs what Premier Wen in a speech to an ASEAN business conference in Malaysia called a ‘durable and peaceful international environment that enables it to concentrate on economic development’.

Wen avowed that China will strive for a region that is peaceful, open, cooperative and harmonious. And to tantalise the ASEAN ministers, she wants the benefits to pass on to other countries in the region as well, namely ASEAN.

Wen tossed a few juicy figures to motivate the ASEAN countries. China intends to double her GDP from the current US$2 trillion. This will involve China importing more than the US$370 billion in goods and services from Asia that had been traded in 2004.

Amd just to make sure ASEAN listens to her more attentively, Wen said that Asia accounts for about 65 percent of China’s imports, and 80% of China's overseas investment. Trade between China and the 10 ASEAN countries topped US$100 billion last year, and rose another 25 percent over the first nine months of this year.

Unlike the USA, ASEAN countries have enjoyed an US$8 billion surplus in their trade with China.

And wait for this - These juicy trade figures may be expected to soar further under a China-ASEAN free trade area, that is planned to come fully online in 2010. No wonder Australia wants to be in and has signed the Treaty of Amity & Cooperation with ASEAN after an initial refusal to do so. No wonder Malaysian Prime Minister Ahmad Abdullah Badawi wishes to emulate his predecessor's call to restrict the trade grouping to only ASEAN + 3, namely China, Japan & Korea - case of less men, more share.

I see these China pronouncements as taking a leaf out of the postwar Japanese economic book – namely, conquer through trade!

Don’t believe me? Look around your house and tell me whether there are 5 electronic or electrical gadgets that aren't of Japanese brand.

Isn't this approach more profitable than dropping cluster bombs on kids or getting killed by roadside bombs, so as to get cheap oil? China will be happy to pay top dollars for anybody's oil, and that's easy when she has very deep pockets with cheap labour.


  1. mmm yes it does look mighty rosy. But I still see that it might not pan out as the (still Communist) Chinese government expects.

    There are rural-urban disparities in China that could lead to unexpected economic and social pressure.

    Increasing prosperity will (at the least) cause increased questioning of having a Communist system on top.

    The Chinese Communist Party has, to put it mildly, viciously, kept its people in line in the past (under Mao) and its ability to cope with internal security crises may derail the best laid plans.

    An unstable Russia is also a possible spoiler.

    But yes its better to develop trade than to seize resources by force. Its sad (but typical) Australia is part of this US adventurism.

    Funnily enough Howard's main (real) reason for supporting Bush is as a premium on the "insurance protection policy" of ANZUS. ANZUS is mainly aimed at "threats" to the north of Australia...

  2. You wrote: Look around your house and tell me whether there are 5 electronic or electrical gadgets that aren't of Japanese brand.

    More than that, it's kinda cute: I bought a thumb drive, it's a Toshiba (Japanese brand). When I turned it over and looked, it shows in clear letters: "Made in China".

  3. Nevertheless a Japanese good developed offshore for labour cost savings, but the Japanese are inside your house - what they had wanted to do but failed in the 1940's.