Craig Eisele on …..

March 6, 2012

Chinese think Tank: China Should Pull Mining Funds Out of Australia Because of US ties

Filed under: Uncategorized — Mr. Craig @ 3:30 am

Beijing’s threat to pull mining funds over our US ties

CHINA should exert direct economic pressure on Australia, including diverting mining investments to other countries, to discourage Canberra from seeking closer military ties with the US, a Chinese think tank has warned.

The think tank says Australia is psychologically divided about a rising China and is “wavering strategically” about the extent to which it should cosy up to the US because it fears Beijing’s growing military capability.

In a rare and critical analysis of Australia’s strategic posture published in the US Air Force’s influential Air & Space Power Journal, Liao Kai of China’s Knowfar Institute of Strategic and Defence Studies says Beijing should use a mixture of carrot and stick to encourage Australia not to take its military friendship with Washington too far.

“To some degree, Australians’ vigilance towards China is triggered by the latter’s aggressive procurement of resources from their county,” Mr Kai says. “By diverting its resources investments to more regions and countries, China could enjoy the twofold benefit of, one, mitigating the risk of relying too heavily on only a few sources of supply and, two, making nations like Australia understand that national interests are often reciprocal.

“Using all necessary economic and diplomatic means, China should try to persuade Australia to keep its military co-operation with the US within an appropriate scope.”

The analysis reflects growing concern in China that Australia is too eager to assist US attempts to curb Beijing’s growing strategic influence in the region, especially in the South China Sea.

It was written before the Chinese government on Sunday revealed another double-digit rise in defence spending with an 11.2 per cent increase to top $US100 billion ($93.4bn) this year, following a 12.7 per cent increase last year.

Mr Kai says China was unimpressed by the Gillard government’s decision in November to allow US marines to use Darwin as a permanent training base, and by joint exercises conducted in 2010 with Australian, US and Japanese forces in the South China Sea. “China is likely to interpret all of these developments as acts of assisting the US in tightening the ‘island chains’ (against China in the South China Sea),” he says.

Mr Kai says China was surprised by Australia’s apparent fear of its intentions. “Although China and Australia in no way pose direct threats to each other and have no conflicts of interest, somehow Australia considers China a potential threat to its national security.

“Economically, Australia is already interwoven with China, but at the psychological level its people are divided about their feelings towards the Chinese.”

Mr Kai says the cultural and political differences of the countries have widened in recent years with the jailing of Australian employees of mining company Rio Tinto, and with revelations from WikiLeaks that “former Australian premier Kevin Rudd apparently told US Secretary of State Hillary Clinton to ‘be prepared to use force against China’.”

The report noted that although Australia “has never clarified its stand in the possible US-China conflict, its decision to allow US marines a permanent training facility in Darwin indicated its sympathies lie primarily with the US. “(Australia) may choose to support both China and the US in jointly transforming the regional order, or it may decide to help the US remain the dominant power.”

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