The Asian Infrastructure Investment Bank: More than meets the eye [Why is the Abbott government giving away $3 Billion to China, when our people need it?]

By APP National Chairman, Andrew Phillips

One can be forgiven for having a somewhat jaundiced view regarding any claims made by the Liberal Party in Australia. Particularly those involving concern for the national interest, defence of the individual, and the incessant posturing against all forms of Communism.

These positions are for public consumption only. Like previous governments, the Liberals continue to openly embrace the dogma of globalisation. With their penchant for economic rationalism, they continue to pull the rug out from under the feet of both Australian workers and producers alike, and the current campaign for so-called “free trade” further entrenches this disadvantage.

The difficulties the current government has had introducing a stringent budget has been given a great deal of publicity. One must admire the ability to take on tough decisions when necessary and few would ever deny the importance of fiscal responsibility. Ignoring the double standards displayed by the government which recently spent several million dollars of Australian taxes on redecorating the Lodge so Tony wouldn’t have to look at a second-hand paint job or tolerate artwork that may not be to his personal taste, the declaration that Australians must collectively tighten their belts for the national interest is one that can, to a degree, be respected.

Australia is a land of immense wealth and potential, yet with a poverty level of 14.4%, being 3% above the OECD average, our people have a right to hold the government to account.

At a time when the nation is apparently under financial duress, Australians have the right to question how the government can suddenly find $3 billion to help establish the new Asian Infrastructure Investment Bank (AIIB)?

The AIIB, to be based in Beijing and headed by China, is said to rival the Asian Development Bank, located in Manila and traditionally headed by a Japanese financier.

At a time when Joe Hockey is lamenting a massive budget black hole, due in part to a massive cut in government revenue due to the collapse in commodity prices, one can only question the reasoning behind this rather obvious attempt to ingratiate ourselves to China.

To further accentuate this bizarre relationship we have with Communist China, in September 2014 the Australian Ambassador to China, Ms. Frances Adamson, noted the prediction made that there would be a drop in iron ore prices by up to 35%. Ms. Adamson then proceeded to praise the ability of
mining companies in Australia to ramp up production of this non-renewable resource at a time when prices were low, thereby ensuring low prices and exacerbating the government budget position.

Given the Liberal Party’s self-proclaimed distaste of Communism and all forms of totalitarianism, not to mention the moral high ground it has claimed for itself as the staunch defenders of the individual, freedom and personal responsibility, Australians have a right to question why the Abbott government continues to forge strong ties with a One Party State with an abysmal human rights record and a record of endemic corruption the envy of any Banana Republic.

Free Trade Agreements, the New Colombo Plan, open slather “investment” (which in reality is little more than a sell off of assets at bargain basement prices), and pandering to Communist bully tactics by refusing to recognise the legitimacy of the democratic state of Taiwan — a sad indictment of the Liberal Party’s stand on China and globalism in general.

This situation in itself is enough to question the wisdom of the government’s foreign relations policies.

Why is a government, one apparently so anti-Communist, so keen to sign onto China’s crusade of chequebook diplomacy in our own region, at a cost to Australian taxpayers of $3 billion?

However, given our long standing alliance with the US, one must also question why the Abbott government has ignored the warnings by the US against payrolling this Chinese-controlled bank.

It is well-known the Chinese hold approximately $1.7 trillion of U.S debt and periodically play games by threatening to call in or sell off this debt, thereby raising US interest rates and sending the international economy into decline. Of course, by pushing too hard this could also damage the Chinese economy in the long run by making their own produce less competitive and resulting in consumers in economies similar to that of the US actually buying products produced in their own countries (a novel idea).

Unless of course, China can find (or help develop) a new market with a rising Middle Class, no import restrictions, and a constant supply of cheap, raw materials prior to economically knobbling its only other rival in the region — the US.

Given China’s current campaign to increase it’s economic presence in Africa and its renewed push in our own region — it’s food for thought.

References:
“Lodge renovation hidden from the public as cost blows out to $4.45m”, The Canberra Times, 24 May 2014 (Tom McIlroy)
“Asian Infrastructure Investment Bank: Australia to sign Memorandum of Understanding to join China development fund”, ABC News, 30 March 2015
“China and Australia: Leadership and partnership in the Asia Pacific in 2014”, Australian Embassy, China, 24 September 2014 (Frances Adamson, Australian Ambassador to the People’s Republic of China)
“U.S. debt to China: How much debt does China own?”, About News, 4 January 2015
“China’s road to growth in Africa”, Businesss Spectator, 9 February 2015 (Lauren Johnston)