May 15th 2010

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Articles from this issue:

COVER STORY: Henry Tax Review’s vicious attack on miners, families

FAMILIES: How Henry tax proposals will undermine families

EDITORIAL: Rudd to bankroll human rights activists

CANBERRA OBSERVED: Verdict on the Kevin Rudd experiment

FEDERALISM: Hawke, Howard and Abbott seek to curb states' powers

GLOBAL FINANCIAL CRISIS: Fault-lines widen in world's financial system

UNITED STATES: Is President Obama a real-life Manchurian candidate?

KOREAN PENINSULA: Torpedo attack suspected in mystery sinking

FOREIGN AFFAIRS: China and the West: war without guns

UNITED KINGDOM: Christianity criminalised in Britain

EDUCATION: Maths Online: the new resource for students, parents and home-schoolers

SOCIETY: How biotechnology affects the family

GENDER AND IDENTITY: Children with gender identity disorder

OPINION: America: the most generous nation on earth

Let's create new Australian states (letter)

Labor and Liberals on childcare (letter)

AS THE WORLD TURNS: Canadian province may scrap human rights tribunal; Lithuanian president told to support Baltic gay march; UK Lib Dems' secret support base - Muslims; Stalin's Ukrainian famine; Why the left can't stand Sarah Palin

BOOK REVIEW: KEYNES: The Return of the Master, by Robert Skidelsky


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China and the West: war without guns

by Ian Adie

News Weekly, May 15, 2010
The international mainstream media speculate on what China is up to, rivalling or replacing the United States of America, the world's sometime "sole superpower".

Chinese army officers openly called for retaliation against America's arming of Taiwan by all sorts of "oblique means and stealthy feints", including sales of US bonds. Behind the latest Sino-US cold war lie many years of cyber-warfare and espionage, but also struggles for control between the power structures within China.

Reports on censorship of Google by the People's Republic of China (PRC) Government, coupled with internet-hacking, highlighted the worsening of relations between the two so-called superpowers.

More important conflicts rumble behind the scenes, inside as well as between the two states.

Google searches themselves show evidence of ongoing asymmetric "unrestricted (better, unlimited) warfare". That is, chao xian zhen: literally, "leap limits war", including cyber-warfare, as was explicitly advocated some years ago by two Peoples Liberation Army (PLA) colonels, Qiao Liang and Wang Xiansui, in their book published by the PLA in February 1999.

Chinese-based internet-hackers have long been attacking not only US defence and other government sites, but those of industrial corporations, not just in the US, but in Europe, Australia and India.

In history, information censorship and espionage for a period enable authoritarian governments to achieve two objectives: first, stifle "dangerous thoughts" internally, while second, outsourcing to the capitalist or free-enterprise world the market action, hence innovation and technological productivity, which was stifled at home by censorship, but was essential for sustainable economic development.

In this respect, the Soviet Union was essentially a military dictatorship like pre-war imperial Japan. They developed by stealing, reverse engineering, copying and improving on Western technology, the same method I saw in action during visits to state-owned enterprises in China during the 1970s and 1980s.

The Soviet juggernaut, once hailed as a socialist rival to capitalism, eventually seized up. When will it be the turn of the "authoritarian capitalist" China model?

In my visits to China, I noticed the "State" (guojia) was a fuzzy concept - even for the cadres who led me around those state-owned enterprises. Now, to paraphrase Lenin, who really owns whom?

These issues were behind the trial and imprisonment in China of Rio Tinto's iron-ore negotiating team, including Hu Shitai (known as Stern Hu), an Australian citizen.

He was sentenced to 10 years for taking (originally giving) bribes and stealing commercial secrets. The latter issue was tried with the court being closed to consular witnesses who should have been there under long-standing international agreement.

As eminent Chinese law expert, Jerome Cohen, pointed out, this tells us that Chinese domestic law (for which read clout of some tycoon with Party connections) will override all international treaties and obligations.

The Rio executives knew, like everyone else, that a "good deed fee" of $US1 per tonne had to be paid by the smaller, private steel mills for ore secured on long-term contracts with the big suppliers.

The real principals in the case were the big state-owned steel corporations and their bureaucracy, the China Iron and Steel Association, versus the small firms - likely connected with the wrong Party clique - that they were trying to put out of business.

Of the many bribes allegedly given to the Rio salesmen, the one prominently mentioned in evidence was the 70 million yuan (about $10 million) given to Stern Hu's colleague, Wang Yong, by Du Shuanghua, owner of the privately-owned Rizhao steel mill in Shandong.

The Rizhao steel mill has been at the centre of an effort by state authorities to effectively nationalise it, for a fraction of its market price, and relatives of China's President Hu Jintao had been involved in the transfer of assets of the Rizhao steel million to Hong Kong, putting it beyond the reach of the Chinese state.

The Australian iron-ore exporter thus suffered fallout from tussles between the central state bureaucracy, the state-owned steel mills which have their own ideas about pricing, and the private mills they are trying to crush.

China's other predicament is the crumbling internet firewall. The behaviour of millions of internet-users in China is ominous for the Chinese government.

They rallied to the defence of Google, when it announced that it was closing its China-based search engine because of state censorship. The censorship of the internet can create an unintended mass movement among the youth, who will rapidly learn how to "jump the wall" (fanqiang), or rather tunnel under it, using virtual private networks based on web-servers outside government control.

W.A.C. (Ian) Adie is senior research fellow at the Asia Institute, Monash University, Victoria. He speaks Chinese and Japanese, and closely watches developments in mainland China. This article will appear in the Quarterly Review (London), in June 2010.

All you need to know about
the wider impact of transgenderism on society.
TRANSGENDER: one shade of grey, 353pp, $39.99

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