Chinese moves to put tariffs

on yet more goods from Downunder is of more than serious concern. It is alarming.

Yes, it is an indication that the Chinese are worried too - and so they should be. What worries them is that something might happen which would cause the presently all powerful "party" machine might get a crack in it. Modern technology is making it increasingly difficult to withhold all information - particularly information they do not want their own people to see or which might lead to other demands. It also worries them that they might be held accountable for any number of other actions.  

Yes China is big and powerful and being able to trade with China is undoubtedly beneficial to the economy of many countries. There is a growing "middle class" there. They have money to spend. The Chinese can now travel abroad on holiday too. It's all good - up to a point.

 Downunder has a long history of kowtowing to China. The excuse has always been something like, "If we want to do business with China..." Yes, if we want to do business with China then we have to do it in the way that China wants. 

China is like a gang leader in the school yard. Everyone wants to be a member of the gang because treats (in this case business opportunities) are handed out. However belonging to the gang comes at a high price. The gang leader tells you, "You can't be friends with X.... and still be a member of the gang" and "You have to let me have some of your toys (land)" and "You have to say you believe I am the leader" (not any other belief system).

If you want to be part of the gang then you have to accept the control of the leader. It might not be fair or reasonable  but it is the price you have to pay.

There are other people in the school yard you would like to be friendly with but, unless they are also members of the gang, then it is not wise.  If you leave the gang then every effort will be made to isolate and ostracise you. Other gang members may feel some sympathy but they will look after their own interests first.

I know one man who spent $28m about twenty years ago. He built a factory in China. The Chinese were delighted. It was going to employ a lot of people. It was going to produce something they could use to produce yet more. Everyone thought this was going to be a "good thing". An enormous amount of work went into it - and then things soured. The man who had built the factory wanted a fair share of the return, what was originally agreed to in the contract. The contract had been agreed. Everyone had signed it. What was wrong? The Chinese simply shrugged. The contract? The contract meant nothing to them. It was simply a way of getting the factory built in the first place. A fair share? They shrugged again. It was fair as far as they were concerned.  And he hadn't been paying the bribes they had demanded so how could he expect to get anything.

He has been warned by authorities here not to go back to China. If he does he will be arrested. It isn't because he has done anything illegal. He has simply done the wrong thing because he expected to business in the way that business would be done here. He did not accept that the gang leader was so powerful he could simply seize the toys and play with them. 

We have let China become like that. We have not sought out other markets and made close, strong friendships in other places. Until the gang leader falls from grace in the schoolyard we are in serious trouble.  We will need to be careful not to start drinking the wine they now say we are dumping. It might lead to alcoholic poisoning.