[A shorter version of this article appeared in Green Left, February 25, 2021.]
In a recent Green Left article Dave Bell raised some important issues about China. What is China’s place in the world economic and political system, what is its influence in Australia and how should socialists should relate to it?
The position of the recent Socialist Alliance resolution and my Links article is that Western imperialism led by the United States is waging a cold war campaign against China. This involves both harsh trade sanctions and a big military build-up. The reason for this campaign is that China’s rapid economic, technological and military development has reached a point where it seriously threatens Washington’s interests.
We cannot be neutral in this struggle but must strongly oppose the US-led campaign — notwithstanding the repressive capitalist nature of the Chinese regime.
We can be critical of China's actions is this or that regard but we must never lose sight of the realities of imperialist domination of the world. And we have to call out Western hypocrisy and lies about China.
Our rulers have so many weapons with which to poison the minds of the masses and obscure the real source of their problems. They have racism, sexism and all the rest — and now they are also whipping up fear of China. Yes, they have some real things to base this on but it is still a propaganda campaign which we have to oppose.
Who dominates the world?
Bell asserts that China is a “growing danger to the world”. I think it would be more accurate to say that China’s impact on the world is contradictory. On the one hand, there is its repressive internal policy and its support to some unsavoury regimes. On the other hand, there are some real achievements (e.g., its success dealing with the COVID-19 pandemic) and its startling economic development. Moreover, its very existence is a counterweight to US pressure and it has helped some states (e.g., Venezuela and Iran) to withstand Washington’s onslaught.
Bell argues that China is “not a victim” of Western imperialism. Historically, that is completely untrue. However, today China is pushing hard to free itself from imperialist economic and military pressure and is becoming too strong to push around easily. That fact underlies the current US-led cold war against it.
However, somewhat surprisingly, Bell admits that: “Given the brutality of the United States over the last 100 years, a strong Chinese defence capacity is merited.” Washington is certainly capable of great brutality but the issue is its ongoing economic and military cold war campaign against China.
China is driving as fast as it can towards military parity with Washington, or at least getting to a stage where the US will think long and hard before it embarks on a hot war against China. I regard the military moves of China — the regime notwithstanding — as fundamentally defensive in motivation. In this regard, see the recent very interesting article How the Gulf War sparked China's military revolution. China correctly sees itself as encircled by the US and wants to be able to avoid what happened to Iraq under Saddam Hussein.
'A pox on both their houses'?
Bell says “A pox on both their houses.” In my opinion such a position is dead wrong. We can be critical of both countries but they occupy radically different positions in the world power system. The reality is that US-led Western imperialism dominates the world.
A few basic facts serve to illustrate this. Quite apart from outright bans and punitive tariffs, Washington's domination of the SWIFT international payments system and the special status of the US dollar enable it to impose crippling sanctions on any country. China and Russia are trying to develop a way around this but they are a long way from creating a real alternative.
Far outstripping any empire in world history, the US has 800 bases in 130 countries, with 160,000 troops. With the increasing use of private military contractors, the real number of personnel is undoubtedly much higher. Junior partner Britain has 145 bases in 42 countries.
Who owns Australia’s top companies?
Bell asks: “Is it scaremongering to alert Australians to the take-over of our electricity retailers, ports, National Trust buildings, manufacturing companies and prime real estate?”
Let’s look at who does own Australia and who we should be most worried about. In a September 15, 2019 article, researcher Clinton Fernandes outlines some key facts:
The attention being given to possible covert influence being exercised by China in Australia shouldn’t distract us from recognising that very overt foreign influence now occurs through investment.
Right now, US corporations eclipse everyone else in their ability to influence our politics through their investments in Australian stocks.
Using company ownership data from Bloomberg, I analysed the ownership of Australia’s 20 biggest companies a few days after the 2019 federal election in May. Of those 20, 15 were majority-owned by US-based investors. Three more were at least 25% US-owned.
According to my analysis, all four of our big banks are majority-owned by American investors. The Commonwealth Bank of Australia, the nation’s biggest company, is more than 60% owned by American-based investors.
So too are Woolworths and Rio Tinto. BHP, once known as “the Big Australian”, is 73% owned by American-based investors.
The ASX’s top 20 companies make up close to half of the market capitalisation of the Australian Securities Exchange.
In my view, this doesn't mean that Australia is an economic colony of the United States. The Australian state is still controlled by the Australian capitalist class. But, as Fernandes points out, the very significant US investment in Australia means that Washington has a big influence on our politics — way more than any other foreign player— and certainly qualitatively more than China.
Who are our biggest overseas investors?
According to figures released by the Department of Foreign Affairs and Trade, at the end of 2019 foreigners had invested $3.8 trillion dollars in Australia. The US accounted for 25.6% of this and the UK 17.8%. China (including Hong Kong) made up just 5.7% of the total.
Foreign ownership of farmland
In regard to foreign ownership of Australia's farmland, a December 28, 2020 article by Mollie Tracey in Farm Weekly gives some basic figures:
Chinese investors have continued to be the largest foreign entities with an interest (leasehold and freehold) in Australian farmland for a second consecutive year.
They increased their investments by 0.5 per cent, bringing Chinese interests' total area of Australian agricultural land to 9,199,000 hectares or 2.4pc.
United Kingdom investors remain the second largest overseas land holders, but they decreased this investment by a significant 9.5%to a total of 8,166,000ha.
As such, the gap between the two largest foreign farmland owners has widened further, with all other countries having significantly less Australian agricultural property investments.
Investors from The Netherlands were the third largest foreign holders of Australian farmland, closely followed by American and Canadian investors, which each had about a 0.7% share of Australian farmland.
Whatever else can be said, the modest figure for China doesn't warrant the hysteria being generated in some quarters.
Foreign ownership of residential property
Investment from China in Australia's residential property market has sparked all sorts of anti-China claims. In the first place, foreign buyers are banned from acquiring existing property; they can only invest in new developments. Secondly, Chinese investment in Australian property is actually declining from its peak several years ago.
A May 8, 2020 Domain article by Lucy Macken was headed "Chinese buyers abandon Australian property, replaced by US investors: FIRB".
China’s foreign investors have abandoned the Australian property market in droves, replaced by a surge in the number of buyers from the US.
US investment in Australian real estate soared to $19.5 billion in the 2018-19 financial year, more than three times what it was the year prior, followed by a jump in Canadian investment from $2.1 billion to $13.3 billion.
As North America’s investment has grown, investment levels from China halved in a year from $12.6 billion to $6 billion last financial year, ranking it fifth largest source country for real estate investment behind Singapore and Hong Kong . . .
Of last financial year’s total $88.5 billion worth of real estate approvals more than $19.5 billion came from the US and $13.3 billion from Canada. Singapore accounted for $9.8 billion worth of investment, closely followed by Hong Kong’s $9.3 billion, and lagged by China’s $6 billion and New Zealand’s $4.7 billion.
These are the facts. The claim that investors from China are pricing Australians out of the market is highly exaggerated. The reasons for Australians being priced out of the housing market and growing homelessness is due to capitalist property speculation and the adamant refusal of federal and state governments to build quality public housing on the massive scale required (because that would undercut capitalist property speculation).
Our conclusion
The overseas country with the greatest influence (economic, military, political) in Australia is the United States.
Australia is in a close military-intelligence alliance with the US and hosts a number of key US bases.
Washington has undoubtedly recruited all sorts of agents and collaborators from political, corporate, academic, media and trade union circles. In 1975 the CIA helped topple the mildly reformist Whitlam Labour government.
Whatever China is doing or trying to do, it is undoubtedly a long, long way behind the US in the influence stakes.
What should we do? A socialist policy
What should be the socialist attitude to our economy and overseas investment in Australia, whether from the US, China or anywhere else? Here are some points which seem key to me:
- The commanding heights of the economy — the banks, mines, factories, transport system, supermarkets and so on — must be publicly owned and under democratic control.
- There should be a state monopoly of foreign trade to protect our economy and ensure that any benefits flow via the state to the people who live here. Any foreign investment should be a joint project with the state under strict controls and limits.
- The land (and any mining on it) should belong to us — not to the capitalists of any origin.
- Similarly, the national housing stock should be reserved for people who live here. Foreign ownership should be banned. The state should build quality public housing on a massive scale to end homelessness, house everybody who needs it, and end capitalist property speculation and rent gouging.
Military & intelligence policy
Our armed forces should be reconfigured towards the actual defence of Australian territory against realistic threats, rather than built around “interoperabilty” with the US war machine or projecting imperialist power in the Asia-Pacific region. We simply don’t need obscenely expensive US warplanes or an obscenely expensive submarine fleet. Spend the money instead on meeting real needs in the community (healthcare, education, housing and welfare).
Australia should withdraw from all collaboration with the US war machine — that is, leave ANZUS and the Five Eyes group, and close all US bases here.
Australia should declare its neutrality from all imperialist alliances and pursue a peaceful and constructive foreign policy.