To get rich is glorious

When Chinese Leader Deng Xiaoping commenced liberalisation of the Chinese economy in 1978, neither he nor a single foreign policy analyst would have predicted four decades of remarkable economic growth.

 Comments attributed to Deng Xiaoping, that “to get rich is glorious” were a clear break with the economic communism of Mao Zedong, which left China weaker and more poverty stricken in 1978 than it had been at the time of the communist revolution in 1949. China has not experienced its recent huge economic growth in spite of Western capitalism, but rather because it has appropriated Western capital- ism for itself.

This article is a response to the unfair criticism that China has received from certain quarters in Australia and America, especially in terms of trade and foreign investment. The reality is that China has become very rich very quickly – instead of admonishing China, we should celebrate what I call the three cheers for China.

The first cheer for China is humanitarian – you know, regarding the things the Left pretend they care about with their good intentions, but never suggest anything practical to achieve. The positive humanitarian impact of capitalism on the Chinese economy is incredible. The World Bank argues it best:

“Since initiating market reforms in 1978, China has shifted from a centrally-planned to a market-based economy and has experienced rapid economic and social development. GDP growth has averaged near- ly 10 percent a year—the fastest sustained expansion by a major economy in history—and has lifted more than 800 million people out of poverty.”

When you put into perspective that Australia is only a nation of 23 million people, the fact that 800 million Chinese have been lifted out of poverty as a result of economic globalisation and liberalisation since 1978 is unfathomable.

And how was this colossal humanitarian feat achieved? It wasn’t through foreign aid or twitter hashtags. It wasn’t through the United Nations or NGOs. It was almost entirely the result of Western multinational corporations acting out of their self-interest by lowering their business costs and maximising profit through employing cheap Chinese labour. It’s a shame the supposed guardians of equality and human rights on the Left have not embraced this undeniable fact. It is also a win-win situation, as Western corporations have become more profitable, meaning higher dividends and higher returns on our superannuation at home.

The second cheer for China is that consumer goods are now relatively cheaper for all Australians, resulting in a better quality of life and higher disposable incomes in real terms. We should celebrate rather than recoil when we see ‘made in China’, as we may not have been able to afford a comparable item in the 1950s, when such consumer goods were made in high-cost developed economies. Unsurprisingly, Australia’s main imports from China are telecommunications, electronics, computers, furniture, prams, toys, games, sporting goods, textiles, clothing and footwear. The Institute of Public Affairs published research in 2014 outlining how consumer goods are bigger, better and cheaper today than in the 1970s, a direct result of capitalism and trade with low-cost economies like China. The average Australian would have to work 194.9 hours to buy a tele- vision in the 1970s but now they need only work a mere 9.7 hours. A microwave would have cost you 83.8 hours of hard earned cash back then, and now only 2.7 hours, and a refrigerator 86.4 hours in the 1970s, but only 21.8 hours of labour today. Indeed, if China has become rich then certainly as a result, so have we.

The third cheer for China is that Australia more so than any other Western nation has directly benefited from its huge economic growth, due to its purchase of our exports. Australia has a comparative advantage in our largest exports such as iron ore, coal, natural gas, education, gold, copper, wool, wine, beef, dairy, and tourism. We’re not just the quarry and the food bowl for China, but we’re now also its university and its holiday destination. Australian ex- ports to China now account for over $98bn per year, making China not only our largest export market but also larger than our next three highest ranking markets combined – Japan, the United States and South Korea.

We weathered the Global Financial Crisis in part because of China. We have experienced 25 years of continuous, unbroken economic growth in part because of China. No doubt those Australians who attack Chinese trade and investment must either be misled by shock-jocks, or happy to see a poorer Australia if it means that their xenophobic concerns are alleviated. Figures from the Foreign Investment Review Board (FIRB) show that contrary to the view that Chinese investment is taking over our farms, the largest investment sources in agriculture in Australia are from developed Western nations. However, we should want more Chinese investment in agriculture, not less, because more investment means capital  owing to Australia – it means jobs, growth, productivity and economic development.

The trade unions are wrong to attack the free trade agreement with China. Donald Trump is wrong to argue for a 45% tariff on China. Indeed, you could easily argue that the most important reform and achievement of this Government has been the free trade agreements with China, Japan and Korea together with the Trans-Pacific Partnership, brokered by Andrew Robb and never delivered under Labor.

There are indeed many positive signs for China in the future. It is upon us to embrace the huge economic opportunities ahead and to educate Australians about these opportunities. The best days for China and Australia are still ahead of us.

Together, we can get rich and it will be glorious!

Christopher Rath is President of the Throsby Young Liberal Branch and a member of the NSW State Liberal Executive.