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Tuesday, March 18, 2008

Aussie-Chinese Mineral-Appeasement Love Affair in Trouble, Already?

The new PM of Australia, Kevin Rudd, who apparently can speak Mandarin, but don't really understand how Chinese work, began with appeasing the Chinese and ignoring other Asia/Pacific powers such Japan, India, and, less so, the US.

Within a month of taking power, his foreign minister announced in Beijing itself, minutes after talks with the Chinese, that he'll cancel the next Quad-quasi-alliance meeting - no more consultations, on the periphery of Asian security forum, or joint exercises, which the Chinese protested and issued demarches several times. Mr. Rudd's wants to do anything and everything to keep the Chinese happy. Our MEA was indignant because it came soon after Australia's refusal to supply uranium to India, even if Indo-US deal was sealed along with IAEA buy-in.

Compared to our own appeasement of the Chinese - Manmohan ignoring Tawang when visiting Arunachal Pradesh; not censuring army chief for blaming us for Chinese incursions into Arunachal; and the current tyranny on Tibetan Buddhists living in Dharamasala to keep the Chinese happy, MEA has no basis for being indignant with the Aussies.

Australian analysts have portrayed Kevin Rudd's Chinese appeasement as a non-issue when it comes to Indo-Australia, what was thought to be a budding strategic, relationship. It's a hard case to make. Other than joint consultations on Quad-quasi-alliance, which the former PM John Howard was enthusiastic about, and the uranium purchase interest, there is nothing going between India and Australia on the strategic front, beyond cricket matches.

With the current Japanese PM Yasuo Fukuda being weak even in Japan - he can't even get his central bank chief appointed, and a lame duck President Bush, and utterly incompetent Manmohan, one would have expected mineral-purchase for appeasement love affair between Kevin Rudd and Beijing would have blossomed for at least a few more years. When Robert Gates, US defence secretary, visited Australia few weeks ago, Mr. Rudd told off the Americans, essentially asking them to learn Chinese and start appeasing Beijing. The Americans politely nodded.

But now the Aussies are learning the pitfalls of Chinese minerals-for-appeasement fast.

AUSTRALIA'S mining giants have been blackballed from selling iron ore into the lucrative Chinese daily spot market, in a dramatic escalation of their battle to extract more value from the world's most powerful steel industry.

The boycott is being orchestrated by industry arms of the Chinese Government. It may have already cost Australia as much as $300 million in export profits, Australian mining sources say.

"Neither BHP Billiton nor Rio Tinto have been able to send a single spot shipment into China since January 1," an executive from one of Australia's two mining giants said. "Each time we sign a deal with a Chinese mill they get rejected."

It is understood that no other companies have been blacklisted. Spot market shipments continue to flow in from India, Iran and even Australia's OneSteel.

"This is a shot across our bow," a source from the other large Australian mining company said.

China's steel association told the Herald there was no official directive, as steel companies were acting on their own accord.[China locks out BHP and Rio ore - SMH]

Bharat is well served to learn one would gain nothing by appeasing China.


Photonman said...

It seems to me that there could be a deeper strategy behind the apparent 'surrender' of Australians to Chinese interests.

Given that the US pretty much defends Japan and Australia, it is unlikely that neither would consider such a dramatic move without prior consultation with the US. And that the US considers China a long term rival is well known.

Considered along with India's seeming appeasement to China, this leads us to question - why are these countries appeasing China?

Note that it were these four countries that received demarches from a (presumably) alarmed Beijing!

I would wait a little longer for the diplomatic game unfold...

Chandra said...

I am not sure there is anything deeper about Aussie-Chinese relationship. China is and will be the biggest player in Asia and the world. And it wants to buy Australian minerals, the life of Australian economy, in droves. It's really a great match for Australia.

All I am saying is Australia, under Kevin Rudd, may be putting all its strategic eggs in one Chinese basket, ignoring India and others, and Chinese usually play hard to get. John Howard was lot more balanced when it comes to other Asia countries. I also think US-Australia will always be close allies no matter what.

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