Business, Finance & Economics

Opinion: Why the view is different from Australia


LONDON, United Kingdom — If you want to get away from the mounting feeling of dread in the U.S. and Europe, the sensation that maybe this economic downturn is not quite over and that Barack Obama may not have quite sharp enough elbows to make a success of his job, if you want to get a fresh perspective on things, then you need to go to the far side of the world — just make sure someone else is paying for it.

I've just come back from the far side, Australia to be precise. (Someone else was paying.) Now that the jet lag has cleared away, I am thinking through what I saw, and just as important, didn't see. What I saw in Australia was a country that has weathered the global downturn pretty well. I experienced a couple of weeks of work in which I didn't encounter massive existential despair about the state of the world, in which reports of body counts and corruption in war zones, hypocrisy and corruption in government didn't dominate discussion. (Actually there is plenty of hypocrisy/corruption in Australian politics but there are five major sports seasons in full swing so newspapers tend to be dominated by ball coverage.)

This happy view wasn't just true in Australia. I spent a bit of time in Singapore, visited the docks and spent time watching the armada of cargo ships riding at anchor, waiting to be loaded or off-loaded. Wealth and industry and the lack of introspection that I now recognize as a symptom of economic/existential malaise defined the city.

The reason for this can be summed up in one word: China.

Statistics tell one part of the story. Australian exports to China grew 45 percent year on year in 2009. That's 45 percent growth in the midst of the worst global economic crisis since the ...  Well, you know how to finish that sentence. Australian imports grew as well but not by anywhere near as much — so a trade surplus. Do you know comparable figures for U.S.-China trade? Don't ask. China is now Australia's largest trading partner.

But the ground truth is even more telling. On Australia's east coast, Sydney and Brisbane seem to be one massive English language training center for the new Chinese middle classes. Over on the other side of the continent nation, Perth is enjoying the best of boom times as the gold and other natural resources like iron ore scooped out of Western Australia's mines finds its way to the People's Republic.

Enjoying the sun and the very real good feeling behind the Australian catchphrase, "No worries, mate," I began to think about the huge difference in social outlook between their side of the world and the one where I live. Why isn't everyone out here as concerned about terrorism and economic catastrophe and the pressure that fear is putting on the political system in America and Europe?

There are many reasons but here is one not written about much: China isn't really at war. Even in countries where Americans are fighting and dying, China is doing business. Security provided courtesy of the U.S.

A year ago McClatchy newspapers' excellent reporter Jonathan Landay described American soldiers in Afghanistan securing a road leading to the site of what will be a multi-billion dollar Chinese copper mining venture in Aynak, south of Kabul. The soldiers were actually trying to clear the area of Taliban for their own strategic purposes but their presence made the area secure enough for a Chinese crew to grade and pave a road to the mine site. The copper lode there is expected to help supply China's voracious need for the stuff for the next two decades.

Afghanistan isn't the only place where the American military is operating and American foreign aid is trying to prevent a take-over by Islamic radicals while China goes about the business of providing raw materials for its insatiable economy.

In Gwadar, on the southern coast of the Pakistan province of Baluchistan, the Chinese have built a massive oil tanker facility. If you go to Google Maps and type in Gwadar, Pakistan, you can see it.

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Lots of brown desert and a provincial city of houses the same color and over on a hammerhead spit of land sticking into the Arabian sea is the port. Someday soon a pipeline will be built from Iran's south Pars gas field to Gwadar and Chinese tankers will load up and race around India and the Strait of Malacca to offload the gas in the southern parts of their country. China is regarded as a great partner in Pakistan while with every drone attack America is regarded more completely as an enemy. But if America weren't trying to do something about securing the Pakistani state from implosion, would China be able to go about its business?

Gwadar isn't the only interface between China and Iran. As American leaders expend energy and political capital trying to halt Iran's drive to acquire nuclear weapons, China has recently opened a pipeline into the Islamic Republic from the north via Turkmenistan.

You see where this article is going. On the other side of the world there is optimism and economic drive, in the marshaling yard everyone is coupling up behind the Chinese locomotive. On my side of the world, people are down and depressed, burying their dead, trying to get the drag of billions spent fighting wars in Afghanistan and parts of Pakistan off the books. So much mental energy and money is spent surveilling Iran and every email on the planet with the word jihad in it. Bright minds should be working on other projects. The bright minds in China surely are.

At the end of last year, The New York Times reported on the Aynak copper mine in Afghanistan and quoted Frederick Starr of the Central Asia-Caucasus Institute: “We do the heavy lifting and they pick the fruit.”

That sums up the situation nicely. I am not naturally inclined to provide a talking point for Heritage Foundation/American Enterprise Institute types but it is amazing that the government of the People's Republic of China can get away so cheap. There is much talk these days about forcing China to allow its currency to float freely on foreign exchange markets.

Perhaps a more direct way of dealing with economic imbalances between the rival powers would be for the U.S. to send China a bill for security services. A few billion here and a few billion there, pretty soon you're talking about real money. Why not split the tab right down the middle?