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The case against Mr Hu and Australia China relations

Comments on Glenn Milne “Case calls for Kevin Rudd to ring his China plate”, 13/07/2009, http://www.theaustralian.news.com.au/story/0,25197,25769691-33435,00.html

It appears that Rudd is dealing with a complex China. It may also be the case that China has been dealing with a complex Rudd.

The Australian white paper of defence implicitly sets China as a threat and the excuse for increasing military spending substantially, in the context of a potentially waning US. Irrespective the assumptions are correct or not, that certainly did not send a signal that Rudd and Beijing are close and special friends.

Then there was the Australian government a series shows in the context of a number of Chinese proposals of investments in Australia. New measures regarding foreign investments were introduced immediately after some Chinese investment proposals. Special and strict conditions which are possibly unacceptable to many foreign investors were imposed to approved Chinese investments in Australia. Then there were delays in completing the government’s review of the Chinalco proposed investment in Rio, that could be construed as a tactic to give Rio more time to ride out the share market turbulence and change the relative attractiveness of the Chinalco proposal. In the end, the Chinalco Rio deal failed not by shareholders vote but by the Rio board’ rejection, after months saying that the Chinalco proposal was the best for Rio.

One would wonder what role the Australian government under Rudd played in all those issues regarding Chinese investments in Australia. The Chinese may not be as stupid as we Australians think they are. Also, if the Australian government and big firms can play games with the Chinese, the Chinese may also be able to play some games back. Which side will have the upper hands is dependent on one’s interpretation. It seems the Chinese may have a different interpretation from the Rudd government and Rio.

Now there are reports that the case in which Mr Hu was caught has been approved by Chinese President Hu Jintao. The case now becomes Mr Hu versus President Hu. This, and the timing of the case, whether it was coincidental or deliberate, raise a number of questions for Australia China relations, not just now but long into the future.

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