Monday 10 May 2021

Good news and bad news

On a positive note, the ASX200 closed at an all-time high of 7172.8, finally surpassing the previous closing high set in Feb 2020 (just before the pandemic's impact), and within 25 points of the all-time intraday high.

On a less happy note, a few days after Chinese Foreign Ministry spokesman Zhao Lijian accused Australia of "operating with a Cold War mentality against China" the Chinese State-run outlet The Global Times published an editorial from its editor-in-chief Hu Xijin that included the suggestion that "China make a plan to impose retaliatory punishment against Australia once it militarily interferes in the cross-Straits situation" and that "The plan should include long-range strikes on the military facilities and relevant key facilities on Australian soil if it really sends its troops to China’s offshore areas and combats against the PLA (People’s Liberation Army)." Of course an editorial in a Chinese state-controlled newspaper isn't exactly the same as a speech by a sitting Australian politician, but its a little bit of the 'pot calling the kettle black'.

Meanwhile China continues to buy more than 60% of its imported iron ore from Australia, and switching to an alternative supply (such as a new mine at Simandou in West Africa) could take 5-10 years (or be very expensive if China just went shopping to existing global suppliers for additional iron ore). In that context I'm not sure that long-range missile strikes on Australian soil would do China all that much good, especially if they were in the middle of an invasion of a Taiwan supported by the USA and Japan at the time.

Hopefully we can get back to the pretense that the 'one China' policy means (to us) that Taiwan will remain 'Chinese' without losing its democratic self-government, while at the same time meaning (to Beijing) that Taiwan will eventually/inevitably come under direct party control. Unfortunately the rapid build-up of Chinese military capability, combined with their future demographics and the leader's advancing years, means that the prospects of 'direct action' to 'reunite' Taiwan with mainland China seems to be growing each year.

Subscribe to Enough Wealth. Copyright 2006-2021

No comments: