How can the Prime Minister trumpet a free trade agreement with a country where free trade – indeed freedom – is a chimera? The Age’sTim Colebatch

has distinguished himself today with an examination of the economic,
political – and vital cultural – forces behind China’s current growth.
China, he says, is not a normal country – “the Chinese are normal
people, but their Government and its way of operating are not like
those we usually work with.” And goes on:

Two things make China different. The first is the
combination of size and dynamism … Second, China is different because
it does not have elected rulers.

China faces many threats to its
future: unprofitable state-owned banks lending to unprofitable
state-owned factories; huge regional variations in growth and living
standards, while people are forced to stay on inefficient farms; the
fact that rising incomes around the world lead to rising demands for
democracy.

But the biggest threat comes from its reliance on a
massively undervalued exchange rate to drive growth. An undervalued
currency makes exports cheaper, hence leading foreign investors to
locate in China, hence leading to more construction, employment,
retailing, local manufacturing and a host of spin-offs.

It is
propping up the US economy to live beyond its means so it will consume
more Chinese goods. But it cannot do so eventually; as the World Bank
and IMF have has told it, the US dollar will ultimately plunge, and
China stands to be the biggest loser.

And this leads to his most important point: “China’s leaders know this,
yet they keep stalling, fearing that reform will threaten their ability
to control the forces they have juggled so successfully for so long. It
is not a good omen for its aspiring trade partners.”

The
military controls much of China’s economy – from factories to
construction. Chinese goods found on supermarket shelves are made in
its very own gulag, the laogai. Why don’t we ever hear this word?

In
1997 the U.S. House of Representatives passed the “Laogai Slave Labor
Products Act,” which is meant to increase monitoring of Chinese
products that are made with forced labor. According to the bill, the
U.S. Congress made the following findings:

1. The People’s Republic of China operates and maintains an extensive forced labor camp system – the Laogai.

2.
The Laogai is made up of more than 1,100 forced labor camps, with an
estimated population of [6 million to 8 million] prisoners.

3.
In one part of the Laogai system, known as laojiao, or
re-education-through-labor, Chinese citizens can be detained for up to
[three] years without any judicial review or formal appearance in the
judicial system.

4. The Laogai is an integral sector of the
export economy of the People’s Republic of China and is engaged in the
export to the United States of the goods made by forced labor.

Amnesty
International has accuses China of sending thousands of political
opponents into the prison system. “Some have been sentenced after
unfair trials,” its annual China report says. “Others were still held
without charge or trial. … Torture and ill-treatment remained
endemic, in some cases resulting in death. The death penalty continued
to be used extensively.” There also have been claims that China has
harvested organs from its prisoners.

And we can do business? For more information see the Laogai Research Foundation

.

Peter Fray

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