When we take a step back from the day to day, it truly is amazing how impactful China has become in so many ways globally - something even 2 decades ago would seem laughable. Now it has just passed Japan as the world's 2nd largest economy and is taking its 'satellites' if you will, along with it. And these satellites are not just in Asia - we are seeing a form of benevolent 'colonialism' in Africa [Sep 30, 2009: China Attempting to Secure 1/6th of Nigeria's Proven Oil Reserves] and South America as China thirsts for all things commodities. [May 13, 2009: Commodities - It's China's World: We Just Live in It] The societal impact in 5-10-15 years in these countries as the relationship with China grows, will be fascinating to watch...but for now, it's all peachy as everyone is getting rich and happy (with the help of U.S. savings being sent to China which are then redistributed throughout the world). [Dec 15, 2009: China's Economic Power Unsettles Neighbors]
The story is quite long (link here) but a few snippets:
- The Pilbara—the word is Aboriginal for mullet, a type of fish running in the mountain creeks—is both the end of the earth and the wellspring of Australia's future. The desolate region was home to indigenous people for millennia, then to the stockmen and adventurers who populate fantasies of the outback. It is the last place you would expect to find a businessman from China, let alone several thousand native Chinese.
- Here, representatives of Chinese companies Chinalco, CITIC, Sinosteel, Ansteel, and China Metallurgical Group work alongside employees of BHP Billiton (BHP) and other mining companies, like Box's employer, Rio Tinto (RTP), in which China has an interest. Among their jobs—which include building power stations, desalination plants, and other infrastructure around the mines—is overseeing the removal of the iron ore, which is loaded onto 325-yard-long bulk carriers waiting by purpose-built wharves 500 yards long. About eight of these massive ships leave every day.
- The red earth here contains an estimated 24 billion tons of iron ore. In the 1970s it left in smaller quantities and returned to Australia in Toyotas and Mazdas; now the dirt is going offshore forever, to house and transport workers in the cities of China. In this earth lies Australia's miracle economy.
- As large as the Pilbara project is, it is just one of many China has funded in a boom that has both enriched and troubled Australia.
- China buys A$22 billion worth of iron ore from Australia each year. In 2009, according to the Australian government, nearly a quarter of the country's exports, A$42.4 billion worth, went to China. The year-on-year growth was 31 percent.
- The billions pouring in from China have helped Australia escape the global recession and enjoy a national unemployment rate of just 5.1 percent, about what it was before the financial crisis crushed many other economies.
- "A 20-year-old off the street can come up to the Pilbara and earn A$92,000 a year," says Boxy. The median household income in Australia is A$67,000. "He can fly in and fly out 17 times a year for two-week stints, like I do, and he'd be silly not to." (exchange rate is about 93 cents Aussie dollar to 1 US dollar)
- The consequences of a A$6.6 billion trade surplus with China are evident on Australia's streets as much in what is unseen as what is seen: There are no dole lines, no rash of real estate foreclosures, and little of the social unrest that has followed economic downturns elsewhere.
- China's hunger for Australian resources has aggravated the deepest divisions in Australian society over population size, immigration rates, taxation, and infrastructure.
- Public opinion reflects this ambivalence. In new polling conducted by the Lowy Institute for International Policy, an Australian think tank, 73 percent of Australians say Chinese economic growth has been positive, but 57 percent say there is now too much Chinese investment. Economic power has brought fear, too: 46 percent believe China will pose a military threat within the next 20 years.
- In June, Wiltshire was one of many locals surprised to see the Sino mine project in the Pilbara advertise for riggers, crane operators, and fitters who speak Mandarin. As an unhappy union official named Joe McDonald put it: "The only bloke I know who can speak Mandarin is Kevin Rudd." As more Chinese investment comes in, it's inevitable that they'll want to bring in their own workforce, with lower costs and conditions than the locals. Why else would a company advertise in a way that shuts out pretty much every Australian job applicant?"
[Jun 10, 2010: China's Thirst of Any Commodity That Moves Leads to Thawing of Relationships with Russia]
[Feb 16, 2010: India Worries as China Builds Ports in Southeast Asia]
[Nov 11, 2009: China Continues Expanding "Infrastructure for Resources" Policy with Agreement in Malaysia]