Malcolm Turnbull and Xi Jinping shake hands

One of the great myths peddled by Australian politicians — generally, but not always, out of their still extreme ignorance about China, our country’s largest trading partner — is that there is a difference between government and private money.

Chinese donations are finally under the media microscope. And as one of the many arrows in China’s soft-power quiver, it’s vitally important that this is understood. The issue is at the centre of Australia’s singular economic dilemma: to keep taking China’s money, or to put the brakes on it and therefore risking the nation’s prosperity.

We have been told by a string of ministers and prime ministers, in recent years, that Chinese investment is moving from the billions being invested by state-run companies to private companies.

But this is largely a myth. There is no such thing as private wealth in any substantial form in China. The ruling Communist Party in China is all-pervasive. Not only does it have almost 90 million members, but nothing of significance in commerce happens without its knowledge, and the fingers are in the pies at every turn.

China’s rich lists are peppered with member’s of the Communist Party. The more successful they are, the farther up the party chain on the various rubber-stamp parliaments — the National People’s Congresses — that operate at national, provincial and city levels, or their even more toothless twins, the Chinese’e People’s Political Consultative Conference.

To do business, in China, one has to do business with the party. Any organisations of any size have to have their own, internal party committees.

[Chinese largesse taints all, Dasher just a cog in the machine]

Successful business people are at once co-opted by the Party — the singular successful stratagem devised by Jiang Zemin that also led to the institutionalised corruption that has so deeply infected the party, it has had no choice but to publicly fess up to how bad it is.

This is not to say Australia has not been completely blind — we just do not want to know because we do not know what to do. It’s timely that it was the often-maligned, suddenly gone Stephen Conroy who banned telecoms equipment-maker Huawei Technologies from even bidding to have its equipment installed in Australia’s now-tattered National Broadband Network project.

That should have lit up warning signs, but no, Malcolm Turnbull, then his opposite number in communications, promised a review. Huawei, by that stage, had installed a paid local board including former Howard government foreign affairs minister Alexander Downer. Exhibit A.

Huawei remains a private company but one still so opaque that it has refused to open the kimono on who actually owns it. And even if we knew that every shareholder were a private person, that misses the point: no one will ever know its relationship with the powerbrokers in Beijing and the country’s military. But it could never have been as successful as it is without those relationships being extremely close and most likely financially beneficial to its friends in the party. That’s business in China.

Because in China, without such patronage you simply cannot succeed. To look at it another way, those handful of very wealthy businessmen who have tried to stand up to the party most publicly  have ended up paraded on national television “confessing” and/or in prison.

[Read Fairfax for the scoop … and the spin]

Yet China’s often heavy-handed, but still effective, military aggression has for a moment seemed to turn the tide against investment with the rejection of major (albeit symbolic) agriculture deals — and, most recently, the bid for a 50% stake in NSW electricity monopoly Ausgrid.

So, as the China action steps up, the government, like its predecessors, does not have a cohesive China policy in this new age of Chinese investment and military aggression.

Let’s be clear, China is not upset about the investment nyet for the rounding-error profits from a bunch of poles and wires at the end of the world. It is upset because State Grid was invited, in good commercial faith, to enter the bidding process, giving the party-state the logical assumption that, if successful, the bid would be approved. Right or wrong is not the point. It’s the why. Politically driven panic? Pressure from the right and the National Party? Scales falling from eyes? Paranoia?

Who knows? What we do know is that the government is doubling down on its incompetence; furiously trying to attempt a backflip with a pike, executed with its usual wobbly certitude.

Yet, like the hapless Sam Dastyari, this remains a sideshow to the main event. And that’s the vexed question of how Australia should deal with China and its Communist masters’ insistent pursuit of hegemony via the twin arcs of economic and military influence-cum-power projection, even as it relies on Beijing for export dollars and seeks (begs for?) its investment.

The answer, like the government’s, remains unclear. But one thing is for sure as the government and media mulls those thousands, millions and billions pouring in from the Middle Kingdom with its corrupt mafia-state originated investment, donations and blandishments: if it looks to good to be true, it probably is.

Ergo, yesterday, Australia’s newish Trade and Investment Minister Steve Ciobo, whose every loquacious utterance must make the PM yearn for his predecessor Andrew Rob’s measure and gravitas, was in Hong Kong (China for beginners) trying to convince China that yes, really, Australia really is “open for business”. But what are the hours?

Here’s what Ciobo eventually told David Speers on Sky:

“… that’s a proposal that’s been put forward. Ultimately the Treasurer will provide a submission to Cabinet. That submission would embrace the various proposals that are put forward and suggest a course of action. Now you’d understand, David, I’m not going to speculate as to what that might be. That is one approach, it’s not the only approach, there are other alternatives available.”

Yes, Minister.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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