Muddled on the Middle Kingdom

Aug 30, 2023
Global Cities Connection Beijing, China.

Anthony Albanese needs to see for himself what the Chinese economic miracle looks like close up.

It is time for Anthony Albanese to begin to understand what it is we are balancing with China, and what a challenge that is going to be. That the prime minister has mostly, but not entirely, clarified his position on visiting China this year is therefore welcome. But his language around going still has the whiff of hedging.

Even to get this far he has had to thread a path through competing voices of advisers, some saying it is time to go while others wish he would never go.

He is to be congratulated for saying that meeting the leader of Australia’s largest trading partner, the world’s second-largest economy (at nominal exchange rates), and the region’s major power should not be just ‘‘transactional’’.

Those who would prefer him not to go would have made removal of the major problems in the bilateral relationship – unjustified unilateral trade measures and the citizens in detention – a high bar to any visit. By insisting these things should be fixed before a visit would probably ensure a visit would not occur.

Albanese, as a seasoned politician, however, is practised in the art of compromise. He understands that a bargaining chip is leverage until it is no longer. If it has no value to the other side, it is worthless. China was not prepared to ‘‘pay’’ for a visit by Albanese. It has little value to Beijing. The prime minister is going without preconditions.

The official program will depend in part on whether it is designated as a ‘‘state visit’’ or a ‘‘working visit’’. Some advisers will want a working visit, lest it seem as if there is too much pomp and ceremony.

If working level, the Australian public will be denied the spectacle of our prime minister wandering past perfectly turned-out soldiers at least 30 centimetres taller than him. In Germany, on a similar occasion recently, Albanese seems to have managed to get himself lost. No such mishap will occur in Beijing.

If the weather is fine, Albanese will notice that Beijing, or any other major Chinese city, is not the gagging, polluted environmental stew that many still think. It is an uncomfortable truth for comfortable middle-class folk that economic growth leads to better environmental outcomes, once incomes rise beyond a certain level.

Beijing’s improved air quality was helped by closing the massive Soviet-era Shougang steel mills in the city’s west, from where the prevailing winds come. The choice of location reflected Beijing’s fears of invasion from the east. In happier times in international relations, Beijing felt secure enough to shift Shougang to Caofeidian on the coast, so it could be more efficiently supplied by seaborne iron ore and coking coal from Australia.

Driving around, he’ll also see a European luxury car show in motion. He should keep an eye out for Barbie-pink Mercedes jeeps and Porsches, even before Barbie has been released. Less obvious is that about 40 per cent of new car sales are electric vehicles, topping the world. China is in the vanguard of renewable energy even as it consumes more coal.

But Albanese would do well to venture beyond the capital. He is a train buff. Since he last visited the country as transport minister, China has covered the country in high-speed trains. It now has more than twice the world’s total high-speed track. Recently, I watched live the Swans defeat the Suns on my laptop on the Beijing-Shanghai train at 350 kilometres an hour, as fast as F1 cars.

As the prime minister admires the skyscrapers, even in smaller cities, the bridges, immaculate six-lane highways, spaghetti-like intersections of high-speed train lines, and cranes across the horizon, he could reflect that much of this depends on Australian iron ore and coking coal, and much of Australia’s economic good fortune depends on sales to China.

When Albanese’s advisers are frothing about India as an economic alternative to China, he might also consider that China produces more than a billion tonnes of steel a year, compared with India’s 125 million tonnes, about where China was in the mid-1990s.

In Shanghai, with a stroll along the famous Bund, taking in the faithfully preserved relics of European colonial occupation, he could see with his own eyes what Walt Rostow called the Age of High Mass Consumption, but now in China on an unprecedented scale.

On the way out, his flight could stop in Shenzhen – a city that was no more than a fishing village on mud flats and peasant farms 40 years ago. He will see a city that looks and feels like Singapore on steroids. He would here glimpse the future of China. A quick lunch of superior seafood, and then he could take the suburban metro to downtown Hong Kong.

It would be a pity to miss Hong Kong, as so much has been said since the riots of 2019, including by Australia. He might be surprised about how little things have changed there, despite political freedoms and legal independence having been constrained.

As they say, travel broadens the mind. The prime minister has done a lot of grinning with world leaders for photo ops, been submerged by the British royal family, first in mourning and then in celebration of a new king of Australia, all managed so that no one can doubt we stand full square with the alliance, with US allies, and with anyone who might be useful in balancing China.

Historically, envoys from neighbouring states visiting Beijing with tribute often returned home with gifts greatly more valuable than those that were given. The ritual of the relationship is what mattered. It was form, courtesy and respect. It was not transactional. So, in going, the prime minister may well leave with his saddlebags full, and be a little more informed.


First published in the Financial Review eEdition August 29, 2023

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