As Australia’s soft power in the Pacific fades, China’s voice gets louder



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China is broadcasting to more than 1 billion people in several different languages, while Australia sits on its soft power reviews.
Screenshot/YouTube

Helen Vatsikopoulos, University of Technology Sydney

This week, Department of Communications and Arts secretary Mike Mrdak told a Senate hearing our Pacific neighbours will soon experience “the full suite of programs available on Australian networks”. This means the region will see some of our most highly rated reality shows such as Married at First Sight and The Bachelor.

This is all part of the government’s Pacific pivot and the A$17 million package to broadcast commercial television throughout the region announced by the prime minister last year. It’s also part of Australia’s “soft power” strategy, a branding that enables it to influence other countries and have its voice heard.

Australia’s soft power attraction in the Asia Pacific has been in free fall for the past few years. The government is sitting on two major reviews. First is the Soft Power Review – a strong recommendation of the 2017 Foreign Policy White Paper – for which the consultation period ended in October 2018. Second is the Review of Australian Broadcasting in the Asia-Pacific, the consultation period for which ended in August 2018.

The second review was established in 2017. This was the first time the government addressed the issue of soft power in the Pacific since axing the ABC’s Australia Network in 2014. The Australia Network broadcast to the region with redistribution partnerships to 30 countries.

The ABC charter states it has responsibility “to transmit to countries outside Australia broadcasting programs of news, current affairs, entertainment and cultural enrichment” that will “encourage awareness of Australia and an international understanding of Australian attitudes on world affairs”.

In other words, the ABC is already enabled as Australia’s soft power tool. Despite this, the government is giving money to commercial televisions to do the work. At the Senate hearing this week, Mrdak denied this was in breach of the ABC charter because it did not involve broadcasting but purchasing content made by Australia’s commercial broadcasters for distribution to regional broadcasters.




Read more:
Lost in transmission: the Australia Network, soft power and diplomacy


The government must move quickly with its reviews and their recommendations, and articulate its policy responses before the next election, if Australia’s standing in the region is to be restored. Because other powers, especially China, are fast filling the gap we’re leaving behind.

The importance of soft power

Soft power is a term coined by Harvard Professor Joseph S. Nye in the late 1980s. He referred to soft power as the ability of a country to gain influence and power through attraction and without coercion. Soft power leads to nation branding or the reputation a nation enjoys in the world.

This is what business academic Yin Fang defines as:

… the total sum of all perceptions of a nation in the minds of international stakeholders, which may contain some of the following elements: people, place, culture/language, history, food, fashion, famous faces (celebrities), global brands and so on.

The 2018 Soft Power 30 Report showed Australia had fallen four places in four years. The report is a measure of the influence of international nations. We are 10th in the overall soft power index but are marked as moving downward: 7th in culture, 6th in education, 9th in government and completely absent from the top ten in the areas of digital, enterprise and engagement.




Read more:
Soft power and the institutionalisation of influence


In the alternative, and hipper, Monocle Soft Power Index, Australia sits at number 8. But the report also warns it “… is in need of a shakeup if it is to remain an attractive proposition”.

It praises the country for committing to an official review of its soft power but adds “it’s unclear if that will now be a priority”.

In addressing a seminar on the future of Australia’s broadcasting and soft power in the region, veteran broadcaster and former head of the Australia Network Bruce Dover said:

Where once Australia was a brand in Asia, people knew what the Australia Network was, they knew what Radio Australia was, it’s lost – it’s gone…

He then added that the axing of the Australia Network by the Coalition government “… was for more political reasons about whacking the ABC than a considered view on the worth of soft diplomacy or having a voice in the region”.

The ABC isn’t entirely free from blame. It abandoned the most needy of its audience in Asia and the Pacific by switching off its shortwave radio service in 2017. Citing outdated technology, the ABC was trying to make the most of its severe funding cutbacks by prioritising digital services. And that’s when China moved in and took over the shortwave frequencies.

So, what’s China doing?

The government’s Pacific pivot is about waking up and finding China has expanded into the region, and not just in infrastructure projects but in broadcasting. A recent ABC investigation reported China’s Central Global Television Network (CGTN) is broadcasting to 1.2 billion people in Chinese, English, French, Spanish, Russian and Arabic and is expanding to create 200 international bureaus by 2020.




Read more:
Soft power goes hard: China’s economic interest in the Pacific comes with strings attached


This may be, as the ABC suggests, “informational warfare”, where the soldiers may actually be Westerners working for the other side. This year alone, more than 2,200 people lost their jobs in the Australian media.

Edwin Maher was one of the first Australians to work for CCTV, as CGTN was then called. He was a weatherman when I worked in the ABC’s Melbourne newsroom in the late ’80s, but for over a decade he has been a presenter on China’s television. There will be more like him in future.

China is actively recruiting Westerners to front its programs. Australian faces will likely present news on on CGTN, while Australian voices broadcast in English to Pacific Islanders on shortwave.

In the competitive world of nation-branding and soft power, who will know the difference? The new Edwin Mahers will be telling the same stories as Australia, but with a China focus. In 2016 President Xi Jinping announced that the media must serve the party and directed them to tell China’s stories that reflect well on the ruling party and its policies.

This is the reality of informational warfare. The Morrison government must release its two crucial soft power reports and announce a policy framework that will determine our standing, influence and power in the region.

Vanuatu’s Daily Post has welcomed the news Australia will provide entertaining programs to the Pacific. But the opinion piece also says:

Pacific islanders aren’t likely to be very fussy about how that comes about. But if the goal is helping Pacific islanders know more about Australia — and helping Australians know more about the Pacific – then a different approach is needed.

Australia’s soft power is too important to be determined by vengeful payback to the ABC, or by currying favour with commercial television barons. It is about statecraft.The Conversation

Helen Vatsikopoulos, Lecturer in Journalism, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Explainer: who are the Uyghurs and why is the Chinese government detaining them?



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Many Muslim minorities in China, particularly the Uyghurs, are arbitrarily arrested and imprisoned.
from shutterstock.com

Anna Hayes, James Cook University

The Uyghurs are Turkic-speaking Muslims from the Central Asian region. The largest population live in China’s autonomous Xinjiang region, in the country’s north-west. The Uyghurs are one of a number of persecuted Muslim minorities in Xinjiang, including the Kazakhs, Uzbeks, Tajiks, Kyrgyz and Hui.

The region’s name suggests the Uyghurs have autonomy and self-governance. But similar to Tibet, Xinjiang is a tightly controlled region of China.

Many Uyghur communities also live in countries neighbouring China, such as Uzbekistan, Kyrgyzstan and Kazakhstan. An estimated 3,000 Uyghurs live in Australia.

China’s President Xi Jinping has overseen a hardline approach towards Muslim minorities living in Xinjiang, especially the Uyghurs. In recent years, the government has installed sophisticated surveillance technology across the region, and there has been a surge in police numbers.

Muslim minorities are being arbitrarily arrested and imprisoned. It’s estimated around one million Uyghurs have been detained in what China calls “vocational training centres”.

These are purpose-built detention centres, some of which resemble high-security jails. A recent ABC investigation found 28 detention camps had expanded across Xinjiang as part of China’s program of subjugation.

There is growing evidence of human rights violations inside the centres as well as reports of deaths in custody and forced labour.

Members of the Uyghur diaspora have been reported as requesting “proof of life” from Beijing over disappeared family members back in Xinjiang. The Guardian recently reported an estimate that 80% of Uyghurs in Australia would have a relative who has disappeared into the camps.




Read more:
What China’s censors don’t want you to read about the Uyghurs


History of discrimination

The People’s Republic of China annexed Xinjiang in 1949. At this time, it was estimated the Uyghur numbered around 76% of the region’s population. Han Chinese – the country’s majority ethnic group – accounted for just 6.2%, with other minority groups making up the remaining total.

Since 1949, Han migration to the region has diluted the ethnic ratio. Official statistics show the population is now made up of 42% Uyghurs and 40% Han.

The largest population of Uyghurs live in China’s Xinjiang province, in the country’s north-west.
from shutterstock.com

Beijing does not recognise the region as a colony. But the 1949 annexation represents colonisation to Xinjiang’s Muslim minorities and segments of the population have resisted Beijing’s rule. Many refuse to speak Mandarin, while others campaign for independence.

Beijing regards any discontent or criticism of the Chinese Communist Party to be threatening. Minority dissent is treated as a danger to state security. This is even if it involves moderate voices calling for improvements in health, education and employment.

To Beijing, territorial integrity is of utmost importance. It does not tolerate any expression contrary to the official position that Xinjiang has always been part of China.

Beijing has long considered Xinjiang and the Muslim minorities such as the Uyghurs to be “backward”. During the Communist Party’s Great Leap Forward (1958-1962), ethnicity and religion were singled out as both “obstacles to progress” and “backwards custom”.

Brutal crackdowns in the 1980s and 90s led to significant numbers of Uyghurs fleeing China to seek asylum.




Read more:
China’s Uyghur re-education centres in Xinjiang will not produce a loyal and obedient population


Current situation

Repeated attempts at rapid and forced assimilation, discriminatory and oppressive policies, and a cycle of what commentators have labelled “repression-violence-repression” have led to periodic protests across Xinjiang.

In extreme cases, acts of terrorism – such as the Kunming train station attack – have been carried out both inside Xinjiang and in other parts of China.

In recent decades, Beijing has recast the Uyghur ethnic group as a terrorist collective. This has allowed Beijing to justify its transformation of Xinjiang into a surveillance state. There has also been a marked rise of Islamophobia across China.

Some Uyghurs have been employed by the state to spy on other Uyghurs, reporting any suspicious or illegal behaviour. This includes if someone has given up smoking, refuses to drink alcohol or even if a Uyghur refuses to watch Chinese news broadcasts.

Beijing’s surveillance includes face and voice recognition, iris scanners, DNA sampling and 3D identification imagery of Uyghurs. These were introduced following Xi’s 2016 appointment of Chen Quanguo as Xinjiang Party Chief. Chen’s previous appointment was in Tibet, where he implemented similar control measures over the Buddhist population.

Beijing claims the detention centres across Xinjiang are for “vocational training”, but a US Congressional hearing on the camps and subsequent report characterised them as “political re-education” centres. The education involves daily indoctrination into Communist ideology and attempts at eradicating minority culture, language and religion.




Read more:
Patriotic songs and self-criticism: why China is ‘re-educating’ Muslims in mass detention camps


Recent reports have identified more than 100 Uyghur intellectuals including writers, poets, journalists and university professors are now among those detained. The persecution of intellectuals, who speak out against oppression, and continue traditional practice, occurs even if they are moderate in their views and working towards reconciliation.

In 2014, Beijing arrested Ilham Tohti, an economics professor who rejected separatism and promoted reconciliation in Xinjiang. He is currently serving a life sentence after being falsely accused of being a separatist.

Pressuring the Chinese government

Xinjiang is geographically important to China’s Belt and Road initiative – a development strategy involving infrastructure and investments in Europe, Asia and Africa. This could provide an avenue for the international community to apply diplomatic pressure in the way of sanctions. Another option is suspension of, or withdrawal from, existing Belt and Road agreements.

Outside countries have a duty to intervene and force Beijing to comply with international human rights.The Conversation

Anna Hayes, Senior Lecturer in Politics and International Relations, James Cook University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

A Trump-aligned World Bank may be bad for climate action and trade, but good for Chinese ambitions


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A World Bank in sync with Donald Trump’s views about climate change and multilateralism would probably help to increase Chin’s role in international development and finance.
Shutterstock

Usman W. Chohan, UNSW

The seat of World Bank president is becoming vacant. Its president, Jim Yong Kim, will step down on January 31, three years earlier than his term formally ends.

His move – described as “sudden” and a “shock,” particularly since the World Bank has been going through significant internal restructuring – gives US president Donald Trump the chance to appoint a replacement more aligned with his outlook.




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This is because, since the World Bank’s establishment in 1945, the United States has had outsized influence as its largest shareholder. Its president has always been an American citizen nominated by the US government. Kim was chosen by the Obama administration in 2012.

Rumours circulated early on that Trump was considering his daughter Ivanka for the job. Even though that has since been denied, it’s likely he will choose a candidate sympathetic to his worldview.

This may mean a substantial change in the World Bank’s priorities. In particular, in two areas the bank has played an important and positive role: funding sustainable projects to deal with climate change (“climate resilience”); and encouraging robust international connectivity through trade.

Focus on climate resilience

The World Bank has put substantial emphasis on funding projects in developing countries that address climate change. Last financial year 32% of its financing – a total of US$20.5 billion – was climate-related.

Recently approved World Bank projects included climate resilient transport in the Oceania region (such as in Tonga and Samoa), and solar projects across Sub-Saharan Africa. This is all part of a detailed five-year Climate Change Action Plan underway since 2016.

This concern about the consequences of climate change stands in marked contrast to the Trump administration’s record.

Trump’s disregard of climate science is reflected in the defunding or reorganisation of climate-related research projects and institutions. His appointee to head the US Environmental Protection Agency, Scott Pruitt, played a key role in the US withdrawing from the Paris Climate Agreement and energetically worked to gut pollution protection regulations.

So there’s good reason to believe the Trump administration’s pick for the World Bank will reflect its hostility to climate security, and that the bank’s priority towards funding climate resilience will change as a result.

Antipathy towards multilateralism

The Trump administration has already sought to curb salary growth among World Bank staff. More severely, Trump’s National Security advisor, John Bolton, has argued the World Bank should be privatised or simply shut down.

This is part of a wider “antipathy towards multilateralism” that includes institutions such as the United Nations and the World Trade Organisation.




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Australia has to prepare for life after the World Trade Organisation


Trump’s belief that free trade has hurt the US is at odds with the World Bank’s long history of facilitating reforms designed to promote international trade.

Part of the original logic for the World Bank was that trade was seen as a means to create interdependence, and thus reduce economic conflict that might lead to war.

The Trump administration has shown it is more than willing to revert to an old-fashioned trade war.

Its tariff contest with China (which joined the WTO in 2001 with the World Bank’s help) is already hurting global manufacturing, with the International Monetary Fund downgrading its global economic growth forecasts as a result.

Though a Trump appointee might not upend the World Bank’s commitment to free trade in principle, the result might be an organisation less active in promoting multilateralism in practice.

Playing to China’s strengths

Ironically a Trump-compliant World Bank might result in promoting its sidelining to the advantage of China.

In its first six decades of existence the World Bank was an immensely powerful international institution. But its relevance to international development and finance is now being overshadowed by alternative funding mechanisms such as private-sector lending and particularly institutions related to Chinese international development initiatives.

China is planning through its Belt and Road Initiative to spend US$1 trillion on international infrastructure projects over the coming decade. Much of these are focused on Eurasian and African regions where the World Bank has struggled most to promote sustainable prosperity.

China has also has built a rival to the World Bank in the form of the Asian Investment Infrastructure Bank (AIIB), which has a sizeable balance sheet and a proactive approach to funding projects, including those in sustainable development.




Read more:
US sparks new development race with China – but can it win?


But in climate resilience and global economic integration, the World Bank still retains the mantle of global leader. Thus far it has welcomed cooperation with the AIIB, signing a memorandum of understanding in 2017.

Blunt its work in these two areas and the World Bank becomes more irrelevant. Combined with the organisation’s serious governance problems, which are most unlikely to be addressed by a Trump appointee, the future for the World Bank is not bright.The Conversation

Usman W. Chohan, Economist, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Australian-Chinese author’s detention raises important questions about China’s motivations



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Is the arrest of Yang Hengjun part of a series of retaliatory measures by the Chinese government?
PEN America

Tony Walker, La Trobe University

The arrest of an Australian-Chinese citizen in China for unspecified reasons is the last thing Australia needs at a sensitive moment in the reset of a relationship that has chilled over the past two years.

But whether it likes it or not, Canberra is being drawn into a broader controversy over China’s detention of foreign nationals on grounds that are opaque and at the mercy of an unpredictable Chinese justice system.

The arrest last weekend of author and diplomat Yang Hengjun raises the question of whether he has become part of a pattern of retaliatory measures by a Chinese government that finds itself under stress from within and without.




Read more:
Huawei executive’s arrest will further test an already shaky US-China relationship


At this stage it has not been revealed why Yang, a critic of China’s Communist Party, has been detained. On a previous visit to China in 2011 he was arrested and released without charge. He described that episode as a “misunderstanding”.

What should concern Australian officials is that Yang will find himself lumped with other foreign nationals from countries that may have displeased China and therefore become hostages to a wider diplomatic game.

Beijing’s initially muted response to Australia’s decision to exclude, on security grounds, the Chinese technology behemoth Huawei from building its 5G network may have disguised more intense displeasure.

In the case of the arrest late last year of two Canadian nationals on accusations of “endangering national security”, it is hard to place any other interpretation on their detention than that they are pawns, even hostages, in a broader conflict.

Diplomat Michael Kovrig and businessman Michael Spavor were arrested following the detention in Vancouver of the chief financial officer and daughter of the founder of Huawei, pending her extradition to the United States.

Huawei executive Meng Wanzhou.
AAP/EPA/ Maxim Shipenkov

The US Justice Department is bringing charges against Meng Wanzhou for violating sanctions against Iran.

Her case is highly sensitive and enmeshed in a complex US-China relationship scarred by an ongoing trade dispute. In all of this, Canada, in its response to a US extradition request, finds itself the target of Chinese reprisals.

In the case of the unfortunate Canadians ensnared in a diplomatic argument that originated in Washington, a Chinese saying could be applied:

Kill the chicken to frighten the monkey.

In this case, Canada is the “chicken” and the United States is the “monkey”.

Whatever China’s tactics are in all of this, the arrest of the Canadian nationals on national security grounds represents a very serious development. The ripples from it are spreading as more and more countries become alarmed at China’s resort to what could be described as hostage-taking to protect – or advance – its interests.

One lesson might be that if a country, or a company for that matter, finds itself in a dispute with China, then advice to its nationals or employees should be to steer clear of the People’s Republic.

China’s behaviour in this latest stage would hardly seem to correspond with respect for a rules-based international order.

What can be read into these worrying developments is that under pressure, the Chinese regime is adopting a more combative approach to dealing with its foreign policy challenges as its size and reach brings it into conflict with the United States and its allies.

A slowing Chinese economy is adding to pressures on a regime whose tenure depends on maintaining employment and countering unrest.

Above all else, the issue of “stability” preoccupies China’s leaders, who are familiar with the chaos that has swept the country in its long history.

In Beijing this week, President Xi Jinping expressed his concerns about a difficult period ahead for China as it grapples with challenges at home and abroad.

Speaking to officials he warned of a “black swan” event, in which China might be obliged to deal with unexpected developments that threw it off its course. This included what he called a “grey rhinoceros event” – a reference to known risks that are ignored until too late. He said:

In the face of a turbulent international situation, a complex and sensitive environment, and the arduous task of reform… We must be highly vigilant against “black swan” and “grey rhinoceros” incidents.

These sentiments are hardly surprising given the challenges China faces in transforming its economy from an investment-led to a demand-driven model in a slowing economic environment. But they do suggest a higher-than-usual level of anxiety in Beijing in this latest period.

In the years since China began opening up to the world in the late 1970s, it is hard to identify a period that is more challenging for a hard-pressed Chinese leadership. One possible exception is a period in the early 1990s when the country struggled with inflationary pressures and risks of a hard economic landing from a retrenchment in government spending.

The difference between now and then is that China’s economy then was a fraction of the size it is today. Ripples from a Chinese slowdown were hardly felt beyond China’s shores.




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Australia and China push the ‘reset’ button on an important relationship


Today, the effects of a slowing Chinese economy will have an impact across the globe. This is not least in Australia, one-third of whose exports in goods and services are bound up in a trading relationship.

Australian official cautiousness over the detention of an Australian-Chinese national is explained by a desire not to elevate a dispute with Beijing beyond what is necessary.

Foreign Minister Marise Payne has joined her Canadian and other colleagues in expressing “concern” over the detention of the two Canadians in apparent retaliation for the detention of the Huawei official.

If it transpires that an Australian-Chinese citizen has been similarly detained, Payne will have to go beyond simply expressing concern in solidarity with the Canadians.

In defence of their nationals, including a third individual whose sentence of 15 years for drug smuggling was converted to a death penalty, Canadian Prime Minister Justin Trudeau and Foreign Minister Chrystia Freeland have been outspoken.

What should now be clear is that expectations of China becoming a benign power are mistaken. These latest episodes are proving to be a lesson in dealing with a country that is no longer “hiding its capacities” and “biding its time”, as former paramount leader Deng Xiaoping advised.The Conversation

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

How realistic are China’s plans to build a research station on the Moon?


Joshua Chou, University of Technology Sydney

The world is still celebrating the historic landing of China’s Chang’e-4 on the dark side of the moon on January 3. This week, China announced its plans to follow up with three more lunar missions, laying the groundwork for a lunar base.

Colonising the Moon, and beyond, has always being a human aspiration. Technological advancements, and the discovery of a considerable source of water close to the lunar poles, has made this idea even more appealing.

But how close is China to actually achieving this goal?

If we focus on the technology currently available, China could start building a base on the Moon today.




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Will China’s moon landing launch a new space race?


The first lunar base

The first lunar base would likely be an unmanned facility run by automated robotics – similar to Amazon warehouses – to ensure that the necessary infrastructures and support systems are fully operational before people arrive.

The lunar environment is susceptible to deep vacuum conditions, strong temperature fluctuations and solar radiation, among other conditions hostile to humans. More importantly, we have yet to fully understand the long term impact on the human body of being in space, and on the Moon.

Seeds taken to the Moon by the Chang’e-4 mission have now reportedly sprouted. This is the first time plants have been grown on the Moon, paving the way for a future food farm on the lunar base.

Building a lunar base is no different than building the first oil rig out in the ocean. The logistics of moving construction parts must be considered, feasibility studies must be conducted and, in this case, soil samples must be tested.

China has taken the first step by examining the soil of the lunar surface. This is necessary for building an underground habitat and supporting infrastructure that will shield the base from the harsh surface conditions.

3D printed everything

Of all the possible technologies for building a lunar base, 3D printing offers the most effective strategy. 3D printing on Earth has revolutionised manufacturing productivity and efficiency, reducing both waste and cost.

China’s vision is to develop the capability to 3D print both inside and outside of the lunar base. 3D printers have the potential to make everything from daily items, like drinking cups, to repair parts for the base.

But 3D printing in space is a real challenge. It will require new technologies that can operate in the micro gravity environment of the Moon. 3D printing machines that are able to shape parts in the vacuum of space must be developed.




Read more:
Want to build a moon base? Easy. Just print it


New materials are required

We know that Earth materials, such as fibre optics, change properties once they are in space. So materials that are effective on Earth, might not be effective on the Moon.

Whatever the intended use of the 3D printed component, it will have to be resistant to the conditions of lunar environment. So the development of printing material is crucial. Step-by-step, researchers are finding and developing new materials and technologies to address this challenge.

For example, researchers in Germany expect to have the first “ready to use” stainless steel tools to be 3D printed under microgravity in the near future. NASA also demonstrated 3D printing technology in zero gravity showing it is feasible to 3D print in space.

On a larger scale we have seen houses being 3D printed on Earth. In a similar way, the lunar base will likely be built using prefabricated parts in combination with large-scale 3D printing.

Examples of what this might look like can be seen to entries in the 3D printed habitat challenge, which was started by NASA in 2005. The competition seeks to advance 3D printing construction technology needed to create sustainable housing solutions for Earth, the Moon, Mars and beyond.

NASA’s Habitat Challenge: Team Gamma showing their habitat design.
NASA 3D Printed Habitat Challenge

Living on the Moon

So far, we’ve focused on the technological feasibility of building a lunar base, but we also need to consider the long term effect of lunar living on humans. To date, limited studies have been conducted to examine the the biological impact on human physiology at the cellular level.

We know that the human organs, tissues and cells are highly responsive to gravity, but an understanding of how human cells function and regenerate is currently lacking.

What happens if the astronauts get sick? Will medicine from Earth still work? If astronauts are to live on the Moon, these fundamental questions need to be answered.

In the long term, 3D bioprinting of human organs and tissues will play a crucial role in sustaining lunar missions by allowing for robotic surgeries. Russia recently demonstrated the first 3D bioprinter to function under microgravity.




Read more:
Five reasons to forget Mars for now and return to the moon


To infinity and beyond

Can China build a lunar base? Absolutely. Can human beings survive on the Moon and other planets for the long term? The answer to that is less clear.

What is certain is that China will use the next 10 to 15 years to develop the requisite technical capabilities for conducting manned lunar missions and set the stage for space exploration.The Conversation

Joshua Chou, Senior lecturer, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

China wrestles with contested heritage of conflict and colonial rule



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Dongguan Street in Dalian reflects both Chinese and colonial history, prompting increasing debate about how to manage this contested heritage.
Author provided

Shiqi Xiong, Griffith University; Karine Dupré, Griffith University, and Yang Liu, Griffith University

China often makes headlines on a great variety of topics, yet very little is said and known about its contested heritage. At a time when this country with a complex and rich history is undergoing rapid urbanisation, one might expect contested heritage to be a hot topic.

For example, many Chinese scholars, officials and villagers view heritage preservation and display as tools of modernisation and improvement in “backward” rural areas. Therefore, the project of cultural heritage display becomes a colonising project, one that estranges local communities from their own cultural resources. In that case, the display of cultural heritage in rural China becomes a contested project.

The village of Tunpu in Guizhou province is a distinctive example of this. The language and culture of Tunpu are not derived from local villagers, but are defined by scholars to represent villagers.

More urbanised areas, notably Hong Kong, also have many cases of contested heritage. The city has a long British colonial history and returned to China in 1997. Many cultural heritage sites remained. These including the Marine Police Headquarter Compound, the Star Ferry Pier and Queen’s Pier, and the Central Police Station Compound.

Nowadays, in the development of Hong Kong, there are differences between the governor and the community in interpretation, restoration, preservation, assignment, commodification or elimination of these heritages.

What exactly do we mean by contested heritage?

Interestingly, an international literature review produces no clear definition of contested heritage. Rather, there is a consensus on its common characteristics.

Firstly, the value and meaning to be given to a specific heritage are contested. Most of the time this is because there are different views and conflicts on aspects of this heritage during its preservation, redevelopment or urban restoration. For example, this happened when deciding the future of the Nazis’ Auschwitz concentration camp in Poland. It eventually became an educational tourism destination.

Contestation over heritage has many origins, but always involves negative sentiments.
Karine Dupré, Author provided

Secondly, contested heritage sites always convey a negative sentiment to some extent. Think, for instance, of a walled city: those living either side of the wall will have different attitudes to it. These contested heritage sites are about colonisation, apartheid, slavery, conflict and war, and religious divides.

Although in postcolonial settings multiple communities can succeed in sharing a common negative heritage and become resilient about it, the heritage left by war is always contested, since different countries have different positions. For instance, Japan, America and China have different views of the Hiroshima Peace Memorial (Genbaku Dome), which was inscribed on the World Heritage List. America and China opposed the nomination but for different reasons.

Finally, interpretations of contested heritage by different interest groups fluctuate as these interpretations and meanings might vary depending on the historical period. This is obvious in how the terminology has evolved. It was previously discussed as dissonant heritage and later as ambivalent heritage and even negative heritage.

So what about China’s contested heritage?

As a country with a very long history, China is rich in heritage. It already has 36 cultural heritage sites and four mixed heritage sites on the World Heritage List.

Yet the modern Chinese consciousness of cultural heritage protection began in the late 19th century. This was closely related to Western influence on China at that time (Guo, 2009). That is once source of contested heritage today.

Other contested heritage relates to the traces left by Russian and Japanese colonisation of China. There has been a shift in national heritage policies and in the handling of such memories.

Dalian, on the southern tip of the Liaodong Peninsula, is a good example. Like Hong Kong, Shanghai and Qingdao, Dalian’s development stemmed from colonial occupation. Invaded by the Russians in 1897, the Japanese in 1905 and returned to China in 1955, the city went through half a century of colonial rule.

This has left lasting imprints on Dalian’s urban planning and urban landscapes. Basically, these are either highly valued (the Russian Nikolayev Square main square is heritage-listed), targeted for demolition, or dismissed (low-income districts built under Japanese rule) … until recently.

Model of Dalian’s historical main square.
Courtesy of Dalian Urban Planning Museum, Author provided

A more nuanced view of heritage

Attention to contested heritage is quite recent in China. There is still little discussion about it as urban modernisation has for a very long time been the number one priority.

However, with rising awareness of the cultural and economic benefits that some heritage could bring to communities, as seen in Dalian, the debate about contested heritage has been gradually gaining more prominence. This is important as it contributes to rewriting the national narrative with more shades of grey.The Conversation

Shiqi Xiong, Visiting Scholar, Griffith University; Karine Dupré, Associate Professor in Architecture, Griffith University, and Yang Liu, PhD Candidate. School of Engineering and Built Environment, Architecture & Design, Griffith University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Darwin port’s sale is a blueprint for China’s future economic expansion



File 20181206 186085 1rjr608.jpg?ixlib=rb 1.1
Darwin Port, leased to Landbridge Industry Australia, a subsidiary of Shandong Landbridge, for 99 years.
John Garrick, CC BY-SA

John Garrick, Charles Darwin University

An agreement between Darwin’s city council and an overseas municipal counterpart normally wouldn’t attract much attention. Local government officials love signing such deals. Darwin already has no less than six “sister city” arrangements, including with the Chinese city of Haikou.

But attention has been drawn to Darwin’s newly minted “friendship” deal with Yuexiu District, in Guangzhou, due to Chinese media describing it as part of President Xi Jinping’s signature Belt and Road Initiative.

This suggests Chinese authorities regard Darwin as having strategic significance.

It invites reflection on the wisdom, three years ago, of the Northern Territory government deciding to lease the Port of Darwin (now known as Darwin Port) to a Chinese company for 99 years – and of the federal government going along with it.

At the time the new owner, billionaire Ye Cheng, claimed the Darwin port deal was “our involvement in One Belt, One Road”. This was discounted by some commentators as hyperbole, an attempt to curry favour with the Chinese government.

But now, by design or not, the Darwin port deal increasingly looks like a blueprint for how Chinese interests can take control of foreign ports – as it is doing by various means around the world – without arousing local opposition. Quite the reverse. All levels of Australian government have encouraged it.

It makes Darwin an interesting case study – a point of contest between the strategies of the US and China. Darwin’s port is under Chinese control, while thousands of US marines are based in the city, as part of the US “Pacific pivot” seen by many as an effort to contain China’s influence in the region.


CC BY-ND

How the port deal was done

The deal to lease parts of the port followed successive federal governments refusing to fund necessary upgrading of the port’s infrastructure to meet growing demand.

Infrastucture Australia advised privatisation. Rather than sell outright, the territory government decided to lease the port, and sell a controlling stake in the port’s operator.

Landbridge Australia, a subsidiary of Shandong Landbridge, won the 99-year lease with its bid of A$506 million in November 2015.

Shandong Landbridge has substantial and varied interests including port logistics and petrochemicals. Though privately owned, like many Chinese companies it has strong ties to the ruling Chinese Communist Party.

The company knows how to cultivate political connections. In Australia it gave influential Liberal Party figure and former trade minister Andrew Robb an $880,000 job just months after he retired from parliament.




Read more:
Chinese influence compromises the integrity of our politics


The bid for the port was examined and approved by the Foreign Investments Review Board, the Defence Department and ASIO.

Strategic importance

But the deal put Darwin directly in the crossfire between US and Chinese interests. Then US president Barack Obama expressed concern about the lack of consultation. Former deputy secretary of state Richard Armitage said he was “stunned” that Australia had “blind-sided” its ally.

While the centre of US-Chinese tensions is the South China Sea – where China has militarised reefs in disputed waters – Darwin is important because it is the southern flank of US operations in the Pacific.

Managing the tensions

Zhang Jie, a researcher at the Chinese Academy of Social Sciences, wrote in 2015 about the concept of “first civilian, later military” – in which commercial ports are to be built with the goal of slowly being developed into “strategic support points” – to assist China defending maritime channel security and control key waterways.

Military-civilian integration was among the goals China set in its 13th five-year plan for 2016-20. President Xi subsequently established an integration committee to oversee civilian and military investment in technology.

As with other Chinese port acquisitions, such as in Sri Lanka, Pakistan, Greece and Djibouti, Landbridge is interested in acquiring and developing not only Darwin’s port facilities but nearby waterfront property.

But the Darwin port deal differs in significant ways to other port acquisitions.

It is a far cry from the “debt-trap colonialism” China stands accused of using to gain leverage over other foreign governments, such as Sri Lanka and Nepal.




Read more:
Soft power goes hard: China’s economic interest in the Pacific comes with strings attached


Landbridge has bought the lease, rather than a Chinese bank lending funds to the Northern Territory government to develop the port. If Landbridge was to default, it would lose its money. Any attempt by Landbridge to use the port as security to borrow money from a Chinese bank would trigger renegotiation of the lease.

The territory government retains a 20% stake in the port operator and has a say in key appointments such as the chief executive and chief financial officer. But it will not share any profit that Landbridge may eventually make.

That potential is a long way off. Landbridge Australia reported a loss of A$31 million for the 2017 financial year, with its total borrowings rising to A$463 million. If the deal falls over, the government will need to seek new equity partners. But its immediate commercial risks are relatively contained.

Other risks

Yet risk exposure may take other forms. China’s strategy is very long-term. Darwin is now on the front line in managing tensions between Australia’s most important strategic ally and partner and its major trading partner. Balancing between powerful friends with competing interests may not prove easy.




Read more:
The risks of a new Cold War between the US and China are real: here’s why


There are indications of some recognition of this at the federal level. Australia’s foreign investment review processes have been tightened. A Critical Infrastructure Centre has been created to give extra national security advice. There has been some tweaking of rules about political parties accepting foreign donations.

But others may have learnt valuable lessons too.

Weaknesses in Australian governments at all levels have been revealed. They have been reactive, readily accepting the lure of pearls cast on our shores without considering longer-term currents. Foreign and strategic policy has effectively been left to the local level. While the federal government now seeks to shore up its interests in the Pacific with cash for infrastructure, similar commitments to investing in local infrastructure are essential.

Clumsiness and indecision do not serve Australian interests well.The Conversation

John Garrick, Senior Lecturer, Business Law, Charles Darwin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

G20 summit bring a truce in US-China trade relations – but it’s likely to be temporary


Tony Walker, La Trobe University

The United States and China have arrived at a temporary truce in a trade conflict that was threatening to further destabilise world equity markets, entrench a global slowdown and cause more damage to a rules-based international order.

Agreement by US President Donald Trump and his Chinese counterpart, Xi Jinping, to allow further negotiations before threatened tariff increases on Chinese imports come into effect is a welcome development.

However, this is a temporary respite, a short-term fix, not a long-term solution to myriad trade and other tensions that have put the US and China at odds with each other.

For their own purposes and in their own interests, Trump and Xi have come away from the Argentine capital with a deal that papers over differences that extend from China’s activities in the South China Sea to its mercantilist trade policies.




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Much at stake as Donald Trump and Xi Jinping meet at G20


As far as we know, China’s ruthless assertion of its sovereignty over disputed waters in the South China Sea was not a material subject for discussion in Buenos Aires except, possibly, in passing.

China’s rise and America’s relative decline ensure these global economic superpowers will continue to bump up against each other.

So, what was achieved and what are the prospects for an accord reached on the sidelines of the G20?

In their efforts to lower trade tensions and prevent a further erosion of global confidence, Trump and Xi agreed to a 90-day extension on the imposition of additional US tariffs on some US$200 billion of Chinese imports.

Trump had threatened to increase tariffs from 10% to 25% on an initial batch of Chinese imports from January 1. He had also flagged his intention to impose levies on another US$267 billion worth of imports if progress was not made in resolving broad-based trade differences.

A joint statement laid out a timeline for continuing negotiations. It reads:

Both parties agree that they will endeavour to have this transaction completed within the next 90 days. If, at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent.

In return for these temporary concessions, China agreed to:

… purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between the two countries. China has agreed to start purchasing agricultural product immediately.

China also agreed to crack down on sales of Fentanyl by making it a controlled substance. The US is battling an opioid crisis in which Fentanyl is a lethal component.

In retaliation for US trade actions, China had imposed duties on US$110 billion of imports. A principal component of this is soybeans, effectively killing one of America’s more lucrative export markets.

Trump has been under huge pressure from his Mid-Western rural heartland over a collapse in the Chinese market for American agricultural products.

The two sides also agreed to address structural problems in the trading relationship. These extend to five areas – forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft.

These are highly complex issues and unlikely to be resolved in the short term, if at all.

In the wash-up of the Xi-Trump discussions it appears China has got more out of the deal than the US – at least for now. It has secured a stay of execution for the implementation of tariff increases and forestalled, for the time being, tariffs on an additional bloc of Chinese exports.

In return, it has agreed to buy unspecified quantities of US products and to talk about differences.

Trump’s willingness to compromise after months of bombast reflects pressures from a shellshocked grain-producing constituency and alarm on Wall Street at prospects of a full-blown trade war.

From Beijing’s perspective, China has demonstrated that its growing economic heft has enabled it to avoid the appearance of yielding to US pressure.

If not a “win-win” for China – as Chinese officials are fond of saying – it is certainly not a “lose-lose”.

In a statement at odds with months of fire-breathing rhetoric over China’s allegedly perfidious trade practices, Trump hailed his understanding with Xi. He said:

This was an amazing and productive meeting with unlimited possibilities for both the US and China.

For their part, Chinese officials were more circumspect.

Foreign Minister Wang Yi said the talks were conducted in a “friendly and candid atmosphere”. The presidents:

agreed that the two sides can and must get bilateral relations right… China is willing to increase imports in accordance with the needs of its domestic market and the people’s needs.

Impetus for a face-saving deal in Buenos Aires has been prompted by growing concerns about the global economy. The signs of a slowdown are clear. Trade volumes had begun to moderate in the third quarter, heightening worries of a global retrenchment.

International Monetary Fund managing director Christine Lagarde at the G20 summit.
AAP/EPA/G20 handout

On the sidelines of the G20, the International Monetary Fund’s managing director, Christine Lagarde, noted:

Pressures on emerging markets have been rising and trade tensions have begun to have a negative impact, increasing downside risks.

In its October Outlook statement, the IMF warned about threats to global growth due to trade disturbances.

In their final communique, G20 leaders danced around contentious issues on trade to accommodate American objections to having the word “protectionism” inserted in the document.

In the end, participants settled on the need for reform of the World Trade Organisation to describe a world trading system that is falling short of its objectives. Washington has been agitating for a review of the WTO to strengthen its dispute resolution and appeal procedures.

The US has also objected to a continuing description of China as a developing country, with concessions that enable it to take advantage of less developed country status in its access to global markets.




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As tensions ratchet up between China and the US, Australia risks being caught in the crossfire


On climate change, Washington separated itself from the other G20 members. All, except the US, reaffirmed their commitment to the Paris Agreement. The US announced in 2017 it was pulling out of Paris.

Foreign policy specialists will be sceptical about a de-escalation of trade hostilities given the range of issues bedevilling the US-China relationship.

Reflecting a hardening of US attitudes towards China, and in contrast to the optimism that had prevailed for much of the past two decades, Ely Ratner in Foreign Affairs notes:

Even if tariffs are put on hold, the United States will continue to restructure the US-China economic relationship through investment restrictions, export controls, and sustained law enforcement actions against Chinese industrial and cyber-espionage.

At the same time, there are no serious prospects for Washington and Beijing to resolve other important areas of dispute, including the South China Sea, human rights and the larger contest over the norms, rules and institutions that govern relations in Asia.

A stiffening view in the US towards China is shared more or less across the board. In those circumstances, a temporary ceasefire in Buenos Aires is unlikely to be sustained.The Conversation

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Much at stake as Donald Trump and Xi Jinping meet at G20



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US President Donald Trump and Chinese President Xi Jinping are set to meet again at the G20 in Buenos Aires, at a pivotal moment in world economic history.
AAP/EPA/Roman Pilipey

Tony Walker, La Trobe University

When US President Donald Trump meets his Chinese counterpart, Xi Jinping, on the margins of the G20 summit in Buenos Aires between November 30 and December 1, nothing less than a reasonably healthy global trading system and continued economic growth will be on the table.

It is one of the more significant meetings between two global leaders in the modern era.

The encounter will recall the high-wire diplomacy between Ronald Reagan and Mikhail Gorbachev in the 1980s, which signalled the end of the Cold War and, as it happened, the disintegration of the former Soviet Union.

Or, before that, Richard Nixon’s visit to China in 1972, which resulted in the signing of the Shanghai Communique and an end to decades of hostility between the United States and China.




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The risks of a new Cold War between the US and China are real: here’s why


World markets unnerved by an evolving trade conflict between the world’s two largest economies will take their cues from this encounter between an unpredictable US president and a Chinese leader who will not want to be seen to yield ground. Or, to give it an oriental description, lose face.

This is a fractious moment in world economic history.

Billions of dollars in global equity markets will rest on a reasonable consensus in the Argentine capital. The two sides will reach for a compromise that will enable relative stability to be restored to an economic relationship that is threatening to unravel.

Since a ragged outcome, or even failure, is in no-one’s interests, it is hard to believe Washington and Beijing will not seek to calm legitimate concerns about the risks of a full-blown trade war and its impact on global growth.

US-China trade tremors are already having an impact on growth projections for 2018-2020.

In its latest World Economic Outlook, the International Monetary Fund reports the world economy is plateauing, partly due to trade tensions and stresses in emerging markets.

The IMF has scaled back its global growth projections from its July Outlook forecast for 2019 to 3.7% from 3.9%. It has marked down US growth by 0.2 percentage point to 2.5%, and China by a similar margin to 6.2%.

However, if trade disruptions persist, fallout will become more serious in 2020 with global growth projected to be down by 0.8%, and with it US and China growth down significantly.

Trade wars have consequences, including risks of a global recession.

All this invests the Trump-Xi encounter with more-than-usual significance. A bad outcome will heighten risks of an accelerating global slowdown.

In the lead-up to the G20, American and Chinese officials have been preparing the ground, with the Chinese side anxious to reduce tensions following a November 1 phone call between the two presidents.

But it is less clear that Washington is willing to ease pressure on China to liberalise further a foreign investment environment, seek ways to reduce a trade gap and make more conspicuous efforts to tone down concerns about Chinese pilfering of its intellectual property.

In a media briefing in Beijing, Chinese officials underscored China’s desire for a reasonable outcome in Buenos Aires. Wang Shouwen, a vice commerce minister, said:

We hope China and the US are able to resolve their problems based on mutual respect, benefits and honesty.

However, Trump is continuing to threaten further increases in tariffs on US$200 billion of Chinese imports now set at 10% but due to increase to 25% from January 1. He told The Wall Street Journal this week:

The only deal would be China has to open up their country to competition from the United States.

Trump also threatened to slap tariffs on an additional US$267 billion worth of Chinese imports if negotiations with Xi are unsuccessful:

If we don’t make a deal, then I’m going to put the US$267 billion additional on [at a tariff rate of either 10% or 25%].

This next batch of Chinese imports might include laptops and Apple iPhones, which are among China’s biggest exports to the US.

Further complicating the possibility of a satisfactory negotiation in Buenos Aires is a lingering dispute between the US and China over reforms to the World Trade Organisation to strengthen its dispute resolution and appeal mechanisms.

The US also objects to China’s continued description as a “developing country” under WTO rules. This includes provisions that are favourable to Chinese state-owned enterprises.

A collapse in efforts to reform the WTO would strike another blow at a multilateral trading system that is under more stress than at any time since globalisation gathered pace in the 1990s.

The US-China trade conflict, which is threatening to become a full-blown trade war with unpredictable consequences, cannot be separated from a more general deterioration in relations.

These were given expression last month by Vice President Mike Pence in a speech to the Hudson Institute, in which he lambasted China in a way that prompted talk of a new cold war.

Pence accused China of deploying:

… an arsenal of policies inconsistent with free and fair trade, including tariffs, quotas, currency manipulation, forced technology transfers, intellectual property theft and industrial subsidies handed out like candy. These policies have built Beijing’s manufacturing base, at the expense of its competitors – especially the United States.

The US trade deficit with China reached US$375 billion last year – nearly half the US global trade deficit.

None of this augurs well for a constructive resolution of US-China differences at the G20, although you might hope Trump’s approach would be tempered by concerns about the economic consequences of a conspicuous failure.

What seems most likely, given the stakes involved, is for officials from both countries to be tasked with responsibility for addressing a range of American concerns, with the aim of resetting the relationship.

This would seem to be a best-case scenario.

In the meantime, officials working on the draft of a final communique will be struggling to satisfy competing demands from G20 participants for clear-cut statements on protectionism and climate change.

These have been staples of such communiques since the G20 was formed ten years ago amid a global financial crisis.




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In the economic power struggle for Asia, Trump and Xi Jinping are switching policies


Washington is reportedly resisting an explicit call to fight protectionism. It is also demanding a watering down of the G20’s commitment to the Paris Agreement on climate change.

Consensus on these issues is proving elusive, further undermining efforts to address global challenges.

This underscores a dramatic shift in the global geopolitical environment since Trump gained office.

At the 2016 G20 summit in Hangzhou, world leaders agreed on a “rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system with the World Trade Organisation playing the central role in today’s global trade”.

On climate, the G20 committed itself “to complete our respective domestic procedures in order to join the Paris Agreement”.

Two years later, a “rules-based” trading system is being shredded and the Paris Agreement is at risk of unravelling. These are troubled times, not helped by an American pullback from the stabilising role in global affairs it has played since the second world war.The Conversation

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Blocking Chinese gas takeover won’t damage Australia’s foreign investment pipeline



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A single foreign company having sole ownership and control over Australia’s most significant gas transmission business, says Australia’s treasurer, is not in the national interest.
Shutterstock

Simon Segal, Macquarie University

The Morrison government’s decision to block Hong Kong’s largest infrastructure company from buying one of Australia’s key infrastructure companies seems to make a complicated relationship with China even more fraught.

Rejections of foreign takeover bids are extremely rare. This is just the sixth such decision in nearly two decades.

It might be argued the blocking of the A$13 billion bid for gas pipeline operator APA Group by Cheung Kong Infrastructure (CKI) Holdings reflects increasing politicisation of Australia’s process for reviewing foreign investment.

But this is not a political shot across the bows like China’s announced anti-dumping probe into imports of Australian barley. This takeover proposal was always doubtful. News of its knock-back potentially damaging relations with China, or foreign investment more generally, are greatly exaggerated.




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As tensions ratchet up between China and the US, Australia risks being caught in the crossfire


Always unlikely

APA Group owns 15,000 km of natural gas pipelines and supplies about half the gas used in Australia. It owns or has interests in gas storage facilities, gas-fired power stations, and wind and solar renewable energy generators.


APA Group’s infrastructure assets.
APA

Back in September, after APA accepted the takeover offer from a CKI-led consortium, the investment research company Morningstar judged it unlikely that Australia’s Foreign Investment Review Board would approve the bid.

The board is only an advisory body. The final decision rests with the federal treasurer. Josh Frydenberg signalled his intention to block the deal in early November, giving CKI a few weeks to change its proposal, either by selling assets or finding other investment partners, enough to change his mind.

That did not happen. Frydenberg’s final decision to block the bid was based, he said, on “a single foreign company group having sole ownership and control over Australia’s most significant gas transmission business”.

He emphasised the government remained committed to welcoming foreign investment: “foreign investment helps support jobs and rising living standards.”

It’s not all about CKI

CKI is not state-controlled. It is headed by the son of Hong Kong’s richest man, Li Ka-shing, and has a history of considerable success in investing in Australia.

Nonetheless speculation about the rejection damaging the Australia-China relationship has ensued. In the words of the South China Morning Post: “As the most China-dependent developed economy, Australia potentially has a lot to lose should relations with its biggest trading partner deteriorate further.”




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Australia and China push the ‘reset’ button on an important relationship


Let’s put this into perspective.

First, there is broad bipartisan agreement that foreign investment is crucial to Australia’s economic prosperity.

Second, as already mentioned, this is just the sixth major public foreign investment proposal blocked since 2000. (All but one, notably, have been by Liberal treasurers.)

Third, all six rejections have been case-specific. Each bid has been considered on its merits.

This case arguably has less to with CKI being Chinese linked than with the size and significance of APA, whose transmission system includes three-quarters of the pipes in NSW and Victoria.

In 2016 CKI’s A$11 billion bid for NSW electricity distributor Ausgrid was also blocked (by then-treasurer Scott Morrison) on national security grounds.

But in 2017 CKI won approval for its A$7.4 billion bid for West Australian-focused electricity and gas distribution giant DUET. And in 2014 CKI’s acquisition of gas distributor Envestra (now Australian Gas Networks) was also cleared.

Shifting emphasis

This is not to deny that politics played a part in Frydenberg’s decision.

The seven-person FIRB board was divided (the exact votes are not known). The Treasurer’s call could have gone either way.

Forces within the Liberal Party that opposed Malcolm Turnbull’s leadership have also been deeply hostile to APA’s sale to CKI. Among the most vociferous was NSW senator Jim Molan, who warned of “hidden dragons” in the deal.

For a minority government lagging in the polls and just months away from an election, such views have assumed inflated importance.

Nonetheless the APA decision was not a surprise. Greater scrutiny is now part and parcel of the Foreign Investment Review Board process. In particular, the emphasis has firmly shifted over the past few years to scrutinising national security and taxation areas.




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The Critical Infrastructure Centre within the Department of Home Affairs, which became fully operational this year, brings together capability from across the federal government to manage national security risks from foreign involvement in Australia’s critical infrastructure. It’s particularly focused on telecommunications, electricity, gas, water and ports.

David Irvine, who has chaired the Foreign Investment Review Board since April 2017, is a former head of the Australian Security Intelligence Organisation.

This shifting emphasis does not equate to a bias against foreign investment per se. There is no evidence investors, including Chinese, are being discouraged or significantly deterred from investing in Australia.

CKI itself demonstrates, by returning to Australia despite previous rejections, that foreign investors will not give up so long as the next deal stacks up. There is already speculation CKI has moved on, and now has its eyes on Spark Infrastructure, an ASX-listed owner of energy asset.The Conversation

Simon Segal, PhD research candidate, Business, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.