Michael Pascoe: Our biggest China lie

Three things: China is winning from Gaza; China growing at 5 per cent now is better than China growing at 7 per cent a decade ago; and Australia’s biggest China lie is that we’re spending half a trillion dollars on boats to protect our sea lanes.

The Gaza angle first. There is a regular pattern to Economist magazine articles whereby the author will eloquently make a reasonable argument about something, but then spin and demolish that case with a better argument for the alternative. It makes for entertaining reading, exercising the reader’s mind.

That pattern broke down earlier this month in a column on China’s diplomacy.

“In China’s telling, America stands exposed as a hypocrite, quick to accuse China or Russia of breaking international law and abusing human rights, while supplying bombs used to kill civilians in Gaza,” opened the Chaguan column.

“In Beijing it is said that Russia’s invasion of Ukraine united the West, but Israel’s conflict with Hamas is dividing it again. It is predicted that if Donald Trump is re-elected his allies will learn, once again, that this is a friendless world and that ‘America First’ means what it says.”

Declining confidence in US

The article cites a south-east Asian survey showing declining confidence in America as a reliable partner and greater scepticism about its “international rules-based order”. Gaza is listed ahead of “aggressive behaviour in the South China Sea” as a matter of concern.

“When asked to choose between America and China, should the region have to pick one of those rivals, 61 per cent of respondents chose America in 2023. Now they are divided 50-50. This year’s survey shows growing wariness of China’s political and military clout. But its economic power is seen as unrivalled.”

The column then attempts the Economist 180-degree turn – but doesn’t land it by listing some of China’s disagreements and problems, noting that it is “pushing Japan, South Korea, Australia and other neighbours to upgrade their armed forces and alliances” and concluding China needed to treat foreigners’ interests with more respect.

The strength of the opening lines, that China is winning from Gaza, stands.

Such is the American-centric nature of our media and politics that we don’t see the world as most of the world does, we only view it through the narrow lens of a totally compliant US ally and military base.

Foreign Minister Penny Wong repeating what had been long-standing bipartisan policy of a two-state resolution and noting that “the international community is now considering the question of Palestinian statehood as a way of building momentum towards a two-state solution” caused Australian media and political conniptions.

Welcome perspective

That is mainly a condemnation of our commentariat’s myopia. For a little of the perspective that is so sadly lacking, Paul Heywood-Smith recorded in Pearls & Irritations that 141 of the 193 United Nations members already recognise the State of Palestine.

“Other countries that have intimated a likely recognition in the near future are Spain, Ireland, Belgium and Slovenia,” he wrote.

On top of that, France, Japan and South Korea – none of which currently recognises the State of Palestine – were in favour of admitting Palestine to full UN membership in a Security Council vote on April 18 that was inevitably vetoed by the US.  Twelve of the 15 Security Council members were in favour, the UK and Switzerland abstained.

Australia, remaining in policy lockstep with the US, is increasingly out of step with the world.

Beyond its massive military power, the US is steadily mattering less to that world. Hypocrisy over “the rules-based order” comes at a price.

(You want hypocrisy? Don’t forget Australia withdrew from the UN Convention on the Law of the Sea dispute resolution procedures and the equivalent International Court of Justice jurisdiction two months before East Timor achieved independence – so much for “rules-based”.)

Economic gains

A major economic milepost was passed last year when China started exporting more to the rest of the world than it did to “the West”.

The US-led attempt to isolate China is demonstrably failing, but Australians tend to be only fed the American view.

For as long as China has been rising, there has been an industry devoted to forecasting China’s fall. Whatever Beijing’s economic policy failings and problems – and there certainly are failings and problems – such forecasts continuously underestimate Chinese pragmatism, entrepreneurial drive and resilience.

I’ve been watching China for long enough to remember when the country’s GDP growth falling below 10 per cent was called a disaster when of course growth had to slow as the economy grew bigger. In very simplistic terms, 7 per cent of 200 is 40 per cent bigger than 10 per cent of 100.

It’s happening again now with China’s GDP growth of about 5 per cent, down from 7 per cent a decade ago.

In 2013, the recorded GDP growth of 7.7 per cent for a $US9.57 trillion economy meant an extra $US737 billion. In 2023, 5.2 per cent growth for a $US17.52 trillion economy means an extra $US911 billion ($1.4 trillion in our money).

Yes, China’s statistics have a rubbery quality and GDP doesn’t tell you everything, but that sort of growth is still enough to underwrite much of Australia’s economy.

(By way of comparison, US real GDP grew by a strong 2.5 per cent last year, delivering current-dollar growth of $US1.61 trillion – about a trillion US dollars less than the rise in American government debt to $US34 trillion. China isn’t the only country with challenges.)

It was while checking China’s trade flows that the obviousness of our big bipartisan China lie hit me:

We have been told we are spending $384 billion – and the rest, of course, call it an easy half-trillion – to buy nuclear-powered submarines to “protect our sea lanes”.

That is the lie. We are buying the subs to threaten China’s sea lanes, specifically in its “front yard” of the South China Sea where American nuclear strike forces have been patrolling ever since they existed.

It’s that perspective thing, yet again. How might the US react if China had nuclear-armed battle groups cruising the Caribbean?

It’s a perspective the rest of the world can see, but we can’t or choose not to.

So we’ll just keep repeating the big lie instead.

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