China's recent record suggests dwindling capacity to finance Australia (and Dan Andrew's) economic recovery-Ban of Australian barley, beef may be an attempt to mask weakening financial position;Australia naive to believe that Chinese money can underwrite deficit . In search of Chinese cash,Australia runs the risk of suffering long term damage like Malaysia

by Ganesh Sahathevan


Australian politicians and businessmen, and their senior advisors. work on the assumption that China is and will be an inexhaustible spring of cash. Even highly respected senior advisers like Dennis Richardson seem to think so. 

Meanwhile China's financial problems are a matter of public record.The BBC for example reported in September 2019 that China's economy has been slowing for the better part of the past decade. Accompanying the BBC story were the following graphs:

The Chinese boycott of Australian barley and beef is probably attributable to Australia's demand for an investigation into the source of the Wuhan virus. However it is also likely that the boycotts are a means of deferring imports so as to conserve foreign currency, without having to admit to weak local demand. 

In addition export revenues have been weakened by the worldwide  Wuhan virus induced shuttering of businesses around the world.

Given the above Australia runs the risk of suffering long term economic damage by persisting with its reliance on China.There are many examples of the adverse consequences of doing so, but Malaysia provides an example of how a prosperous country with strong economic growth can ruin itself with a combination of mismanagement and over-reliance on Chinese money. 

Malaysia under the leadership of Najib Razak looked to Chinese investment to cover-up the theft of billions from the 1MDB sovereign wealth fund, and the consequences of that theft for the broader Malaysian economy. Unfortunately for Najib the cash was slow to arrive,and when it did it was in the form of loans that had to be 

renegotiated. The Malaysian economy remains in a vegetative state,and the its debt to China remains.

Australia, and in particular the premier of Victoria, Dan Andrews, seem determined to go down that same part despite the dangers.

END 

SEE ALSO 

Inside The Belt And Road's Premier White Elephant: Melaka