Bitter Aussies moaning about our FTA with China

Australia is in the grip of a debilitating wind down of their economy after the mining boom popped. I’ve always said that Australia had a two track economy, one in the bush based around minerals and mining and the cities. The two are not as inter-related as many suspected.

The cities have been struggling for some time, while the bush boomed. Then it all came crashing down and the minerals sector caught up with the rest of Australia.

Things are not good for their economy.

Our economy is growing, but the Aussie commentators still attempt to bring us down to their level.

Uppity Kiwis feeling boastful about their dollar approaching parity with the mighty Aussie might do well to stick to rugby for their kicks. Their China-driven boom is coming to an end as quickly as Australia’s. And they have less to fall back on when it does.

Meanwhile, reports of Gina Rinehart going long on dairy farms could prove as reliable a warning as many another billionaire diversifying outside his or her area of expertise.

The New Zealand economy’s resurgence has owed much to China’s demand for milk products and getting in early for a comprehensive free trade agreement with the Middle Kingdom.

Trouble is, China has been busily investing and encouraging others to invest in increased and globally diversified milking. Just as iron ore miners have ramped up production both from existing provinces and new projects from Africa to Mongolia, New Zealand’s farmers are facing increased competition from South America to Russia and all points in between, including Australia.

People have got to eat.

This time last year I was in Uruguay, a country that, in several ways, is the New Zealand of South America. It’s small, agricultural, relatively peaceful (the lowest murder rate of the continent), has a similar population of 3 million or so and a large diaspora, manages to perform disproportionately well in its chosen football code, is socially advanced on several levels (gay marriage, legalised marijuana) and has ridden cows to posterity, courtesy of Chinese demand.

Chinese investment in Uruguay is obvious and remarked on by the locals: Chinese cars on the roads, new buildings sporting Chinese brands. And Uruguay is just one small corner of the global market China has been developing as a source of commodities and consumers. It’s been doing that developing both as a matter of Beijing policy and individual entrepreneur’s search for opportunities.

Is he suggesting that New Zealand and Uruguay ignore dealing with China? So Aussies can feel better about their crap economy.

With iron ore returning to earth, so to speak, it is bemusing to observe some of the hype around agricultural commodities. I have a fear that any minute now, Bob Katter will say something like, “if every Chinese just bought one more pair of woollen socks or a decent steak …”.

The reality is that the rise and rise of China (and other developing nations) of course means greater demand for, and consumption of, “Western” foods. The cooler heads know the laws of supply and demand have not been repealed; increased demand moves the price point, which, in turn, encourages increased supply.

Contrary to some of the more alarmist environmental views, the world is not short of potentially more productive agricultural land, given sufficient incentive and climate change notwithstanding. Australia alone has millions of hectares of the stuff, if we wanted to use it. The US is so oversupplied it can subsidise people to grow food to burn in cars. Africa remains, by and large, some decades, if not a century, behind the times and if just Russia, Ukraine and Argentina ever became efficient, Australian commodity farmers should consider another career.

It’s why those same cooler heads know the stuff about Australia becoming the “food basket of Asia” is nonsense. Some produce should do better than it has. The China free trade agreement means many Top End cattle stations have a future other than bankruptcy or glorified subsistence farming. There is rich potential for the best few per cent of agribusinesses to capitalise on opportunities at the top of the market – the high-quality stuff – but the average farmers won’t because the average farmers already don’t; it’s why they’re average.

Which comes back to the hype around the kiwi dollar’s rise. It doesn’t look like a happy story at all, except for those seizing the opportunity to visits “bros” on our side of the “dutch”.

Oh that makes the commentator so much more credible…mocking our accent. What a dick.

He misses a valuable point as he shills of the iron industry…you can’t eat steel, but hungry mouths do actually have to be fed…and one thing the Chinese have got down pat, more so than any other former communist nation ever achieved and that is the ability to feed their people.

Tourism is more important to the New Zealand economy than it is to ours, and we are their main source of visitors. At $1.05, the New Zealand travel experience is expensive: Noosa kills any kiwi bay of anything, there’s only so much sauvignon blanc you can drink and the only remarkable part of skiing the Remarkables is the appalling dirt road to get there.

Barring the discovery of real hobbits, dragons and treasure, the place needs any currency advantage it can get. New Zealand is facing the same problem Australia has known too well: a dollar that is too strong for its own good and too slow to adjust to weakness in its key commodity export.

And there he shows his bigoted Australian centric view of the world, the same attitude that sees Aussies hated in most of Asia and almost all of the S0uth Pacific….don’t believe me…go do business in the region and wonder no more how many times you get asked and then see a sigh of relief when you say you are a Kiwi and not an Aussie.

 

– SMH


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

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