February 23rd 2019


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Articles from this issue:

COVER STORY Something rotten led to fish-kill: perhaps fishy environmentalism

EDITORIAL Resistance grows to Beijing's soft-power push

CANBERRA OBSERVED Climate change: deadly ... to political leaders

TECHNOLOGY Electric cars: UK taxpayers subsidise rich greenies

BANKING ROYAL COMMISSION A step too small?

CYBER SECURITY Chinese smartphone threat extends way beyond Huawei

SOCIETY Such grandeur of spirit

POLITICS John Hewson should have as sturdy a Constitution

FINANCE Hayne royal commission sets agenda for bank reform

FAMILY RELATIONS Dad: a girl's first and most influential love

COMMENTARY Words gone feral: rights and equality

MEDICINE AND CULTURE Book captures tragedy of falling foul of a fanatic

SOCIETY AND CULTURE A dog's life: reflections of a grey nomad

HUMOUR

MUSIC Serialism a killer: Ideas tend to get in the way

CINEMA Cold Pursuit: Revenge served up manic

BOOK REVIEW Why the West and nowhere else

BOOK REVIEW The escalation of horror and atrocity

LETTERS

FAMILY AND SOCIETY The end of Liberalism

SPECIAL EDITORIAL Has Cardinal George Pell been wrongly convicted?

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EDITORIAL
Resistance grows to Beijing's soft-power push


by Patrick J. Byrne

News Weekly, February 23, 2019

 

  • Asian countries are moving away from dependence on Beijing investment capital
  • When will we get our own development bank so Australia won’t need infrastructure funding from overseas?

While Victoria and Western Australia have signed memorandums of understanding (MOUs) with Beijing’s Belt and Road investment project, there has been a growing backlash against Beijing’s investment practices across Asia and Africa.

The WA Government’s agreement went largely unnoticed at the time. However, senior Labor leaders expressed serious concern when the Victorian government signed an MOU in 2018, although a week later Bill Shorten backtracked. He defended Premier Daniel Andrews, saying that the MOU was no more than part of the “normal day-to-day work” of state politicians.

These agreements are at sharp odds with the bipartisan agreement in Canberra to resist Beijing’s aggressive attempts to lock in our regional neighbours (and Australia) to the Belt and Road Initiative (BRI).

Backlash

Throughout Asia, the Subcontinent and Africa, a backlash has been growing against Beijing’s BRI, as outlined in the Foreign Affairs journal of the U.S. Council on Foreign Relations.

It pointed out that at last year’s elections in Malaysia, Mahathir Mohamad defeated the incumbent Prime Minister in part over opposition to the incumbent’s support for the BRI. Citing his country’s inability to pay, Mahathir cancelled two of the largest Chinese projects in Malaysia – a $20 billion railroad and a $2.3 billion natural gas pipeline.

Citing its growing inability to service its international debt, Pakistan plans to negotiate with the International Monetary Fund (IMF) for a bailout. That country’s national debt has ballooned thanks to lending from Beijing. Its estimated $62 billion in lending has generated anti-BRI sentiment in the country.

The new leader of the Maldives, Ibrahim Solih, has vowed to revisit some of the country’s BRI projects, although he is unlikely to back out of major Beijing deals totalling $1.3 billion.

Apart from the strategic issue of dependence on Beijing, a major concern of many countries has been corruption associated with BRI lending.

Kenya has cracked down on corruption related to a Chinese-built railroad. Uganda and Zambia have expressed concerns. Last year, Zambian think tank scholar Trevor Simumba warned that Zambian borrowing from Beijing was becoming unsustainable. He expressed concern about the “severe lack of transparency over many key terms” in the loans.

Initially, many countries saw BRI capital as free or low cost. In reality, loans were often above market rates from concessional lenders such as the World Bank.

Borrowing countries have also grown concerned about Beijing as an investment partner.

To avoid defaulting on its BRI loans, Sri Lanka granted a 99-year lease on one of its ports to Beijing in 2017.

Another problem for many countries is that BRI loans are in US dollars. This requires the recipient countries to run a US-dollar foreign surplus to repay the loans, but many countries lack the capa­city to run a US-dollar surplus.

Further, many BRI investments are long-term infrastructure projects. These can take years to complete and require Chinese banks to roll over debt. However, Beijing has demonstrated that it expects to be repaid on time or it will take punitive measures, as has been seen in Sri Lanka.

Australia’s mixed policies

As part of expanding its soft-power strategy through BRI projects, Beijing established an Asia Infrastructure Investment Bank (AIIB), with a focus on infrastructure investment across Asia, Oceania and Africa. Australia joined up to the AIIB in 2015. Its $US738 million commitment to the bank makes Australia the AIIB’s sixth largest stakeholder.

This commitment came at the same time that Beijing was taking an increasingly aggressive military stand with construction of military bases on man-made islands in the South China Sea.

Indeed, it is ironic that Australia is backing with taxpayer funds the AIIB, which is part of China’s far-reaching BRI soft-power push.

Nevertheless, since President Xi Jinping’s more aggressive foreign policies, there has been a firming of bipartisan support between the federal Coalition and Labor to expand measures to counter China’s influence in our region.

Mid-last year, News Weekly proposed a Pacific Development Bank to support investment across the region to obviate our neighbours’ dependence on Beijing’s BRI. Subsequently, both the Morrison Government and Labor’s Bill Shorten committed to establishing such a bank.

While unity between the Coalition and Labor to resist Beijing is to be applauded, the MOUs that state governments have signed with Beijing both threaten to undermine this commitment and point to a serious national problem – the lack of domestic investment capital for federal, state and territory infrastructure needs and for industry expansion.

Which prompts the question: in the light of the banking royal commission into the failings of the nation’s banks, given that Australia is helping to fund China’s regional infrastructure development bank, and given that both sides of politics propose establishing a Pacific development bank, why can’t Australia have its own development bank established to develop the nation without having to rely on investment capital from overseas?

Patrick J. Byrne is national president of the National Civic Council.




























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