March 21st 2009

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Articles from this issue:

COVER STORY: NCC denounces Labor's decision to fund abortions

EDITORIAL: Meeting the global demographic challenge

CANBERRA OBSERVED: Rudd Government faces horror budget

ECONOMIC AFFAIRS: After meltdown, who will provide for retirees?

LEGAL AFFAIRS: Unelected judges are today's new aristocracy

POPULATION: Melbourne scientist praises China's one-child policy

BUSHFIRES: Greens adopt tobacco lobby tactics

NORTHERN QUEENSLAND: No vision for Australia's vast water supplies

AUSTRALIA AND ASIA: Lucky Country or mugged by reality?

GLOBAL WAR ON TERROR: Lahore terrorist attack affects us all

UNITED STATES: More scandals surround Obama nominations

FOREIGN AFFAIRS: Behind East Timor's 10 per cent growth rate

SRI LANKA: Sectarian, anti-Christian bill re-appears

CINEMA AND CULTURE: Re-writing history, Hollywood-style

AS THE WORLD TURNS: US government schools teach pro-Islamic propaganda

BOOKS: FATHER OF THE HOUSE: The memoirs of Kim E. Beazley

BOOKS: THE TRIUMPH OF THE AIRHEADS and the Retreat from Commonsense by Shelley Gare

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Lucky Country or mugged by reality?

by Warren Reed

News Weekly, March 21, 2009
Canberra is as remote from understanding the Asian mind as it was half a century ago, laments Warren Reed.

As a resource-rich nation, Australia was fortunate that when, half a century ago, Britain turned towards closer economic union with Europe, a resurgent Japanese economy quickly compensated for lost trade links with the "mother country".

Now the Chinese have Australia enthralled. But what have we learnt in those intervening decades, and are we prepared for the brutal battle of wits and wills that's upon us?

Western Australian Premier Colin Barnett spoke in mid-February of his thoughts on Chinalco's bid for Rio Tinto and on the deal's broader implications.

"What I'd like to see," he said, "is that we do have Chinese investment in our mining industry but it be similar to what has happened with Japan from the 1960s - that we get small, stable investments from Chinese steel-mills and Chinese investment groups and that become the basis for a long-term relationship."

Nothing wrong with that. In an ideal world, you'd have to say it's right on the money.

Regrettably though, we don't live in an ideal world. Far from it. China may not opt for such refined civility. It might not roll over to have its tummy tickled. The reality is that Asia - never a coherent entity as we tend to view it - has strategies, ploys and preferences that we're often unaware of.

Take this statement from a vastly different domain. It's Luke Slattery, The Australian's education writer, in that newspaper's Higher Education Supplement on January 21: "We do not need, as sinophile Kevin Rudd resolutely believes, a boost to Asian language education, at least not for mercantile or strategic reasons.

"China, irrespective of America's commercial fortunes, will do business in English. So will India and more or less every other nation. Australia needs more language education, not more Asian language education. The Asian language lobby, of which Rudd is a member, persistently confuses its private enthusiasms with good public policy."

That's largely antiquated nonsense. What the Asian language lobby, which is comprised of more than language teachers, understands is that while Australia is a global trader, it needs to specialise for obvious reasons in the region around it.

As Slattery would appreciate, China, India and Japan aren't in the North Atlantic. And besides, though English is now the world's undisputed lingua franca, it's only a means of communication - and now one that is spoken by more non-native speakers than natives.

It doesn't define how non-natives think, nor does it describe the strategies they adopt in situations - such as the Rio Tinto deal - that can impact heavily on this country's national interests. The strategic disposition of a people is rooted in their cultural heritage, and language learning is undoubtedly the best point of entry into that world of difference.

That's what the Asian language lobby is principally on about. It's only too aware of the fact that our region isn't defined in Anglo-Saxon terms, despite what more gullible types here choose to believe about India. It's also aware - and this is the nub - that the Australian system, whether political, bureaucratic, commercial, academic or social, is still defined in those terms. And why shouldn't it be? That's our heritage.

The problem is that, despite successive waves of Australians going out and working, living and studying in the region, plus significant immigration from there as well, this has had only a marginal influence on the way Canberra and most of our state capitals think.

Canberra is as remote today from understanding what's going on in the Chinese mind as it was 50 years ago. You don't gain promotion by highlighting the differences in practical ways.

I recall a meeting I attended in the national capital some 25 years ago, having just returned from a posting in Tokyo. The topic of discussion was a grand idea to which we wanted the Japanese to subscribe. Present at the meeting were representatives from various parts of the bureaucratic machine.

High political level

Someone suggested that because I was fresh out of Japan I might like to offer a view. I pointed out respectfully that rather than make a démarche to the Japanese at a high political level, it might perhaps be more effective to have a junior officer in our embassy feed the idea in via his contacts. The Japanese at that political level would be more likely to adopt the idea as their own and then feed it up the hierarchy for approval.

The mandarin chairing the meeting looked at me in astonishment. "Good God," he observed sarcastically, "you sound as though you've gone troppo. If you love 'em so much, why the b--- hell don't you go back and live there?"

His quip had as much to do with my having challenged the efficacy of the line he had himself recommended as it did with our differing approaches in Asia. But the warning was there: don't know too much about the new world around us. And if you do, keep it to yourself.

Not much has changed, and, as some older Asia hands will tell you, we've even slipped back.

A decade ago, on a visit to Japan, a Japanese friend from university days in Tokyo told me about a trip he was about to make to Singapore for his company, a major trading concern. A large gathering of overseas Chinese business leaders from around the world was due to take place there, which, incidentally, had nothing to do with his firm.

His task was to lead a "technical team" whose job it was to film - and where possible, record - the degree of closeness that a small target list of the Chinese attending shared with each other. The Japanese company regarded this as important because it could usefully inform its investment plans across the Asian region.

As the hotel involved was well known to both of us, my friend and I discussed the operation in detail. It was a fascinating example of industrial espionage.

Later, on a visit to Canberra, I happened to mention this to a few bureaucrats whom one would have expected to display interest. But no, they thought such an exercise would have been a waste of time. However, from what my Japanese friend told me afterwards, he and his team reaped a "rich harvest".

Meanwhile, in today's Australia, we're repeating many of the debates we've had before on Japan: is there a China Inc. and how centrally controlled is it? Or, rather than that, isn't it more a case of financial and economic power being disseminated among a jostling group of state-owned corporations, each on a long and competitive leash?

The same old Anglo-Saxon blueprint gets laid over everything. It has to be either this or that. Few policy-makers have grasped the fact that it's generally best when dealing with an Asian country to see things as both/and, then look for hidden dimensions on top of that.

Many Australians, a lot of them living overseas, do this with dexterity. The greatest paucity of such skills, paradoxically, is in Canberra.

With the challenges now upon us, the most urgent priority for Australia is to confront the stark reality that while we've been dilatory over recent decades - Japan, our major export market, even slipped right out of our consciousness - much of Asia has been exploiting us ruthlessly.

It's been recruiting people inside our system, even in politics, and engaging in industrial, commercial, financial as well as technological and scientific espionage, with hardly a flutter of resistance from us.

Chinalco should be a salutary warning that we have a lot of catching up to do. But don't expect anything to happen fast. There's too much bureaucratic face at stake.

- Warren Reed was an Australia-Japan Business Cooperation Committee scholar in the Law Faculty of Tokyo University in the mid-1970s. Later, he worked in intelligence and was also chief operating officer of the Committee for Economic Development of Australia (CEDA).

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