Some one should tell the world China’s still a dictatorship.
Who better than the Chinese dictatorship its-self.
It has arrested the Australian negotiating team for spying after a deal between Australia’s Rio Tinto company and Chinalco, a party owned and run state business, went sour because Aussy politicians saw the danger of selling half your biggest resource industry to a dictatorship. Stern Hu and three others of the Rio Tinto negotiation team are in jail. http://edition.cnn.com/2009/BUSINESS/07/10/china.rio.tinto/index.html and http://www.abc.net.au/news/stories/2009/07/12/2623458.htm
None of the information were talking about is classified in the western world, the price of iron and the cost of coal, but in communist states everything is classified when the party decides it is. In the Chinese boom years these laws were suspended. Now they’re back. Western businessmen and woman are reportedly packing their bags by the dozens. Australian politicians have flown to Beijing including Simon Crean a former union boss turn Labour minister. He may not be the best choice. However he may be cured of his left wing delusions if he hits hard and fails.
Only three out comes are possible.
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Australia gives up Stern Hu and lets the communists have him. A mass exodus of western businessmen from China would result and there would be a huge battle in Australian politics. The conservatives over here smell blood.
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China backs down and releases Hu. That would further damage the party; is already on its last legs (less than 0.1% population). To do so and save face it must scapegoat someone else. If the party scape goats the arresting officer, it will loose the support of many in the police and army. If it scapegoats Chinalco that would create a powerful internal enemy.
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China and Australia end up in an economic war if embargo and counter embargo. The Australian labour party has a limited tool set when it comes to free trade. Historically its been heavily protectionist; the White Australia policy was its creation at federation (1900).
Would this crash commodities and generate an impact on Chinese’s currency and banking activity? Can the worlds central banks handle a huge battle over business law and accusations of spying against businessmen who have only done what is normal business practice in the west? Is there a possibility that a banker may wind up in Stern Hu’s shoes next? Are we about to see something big that ruins all the plans of the statists players, FED, G8, etc? Should we be warning friends to batten down for a storm?