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Globalisation in the time of Corona Part 2

Coronavirus

COVID-19 has resulted in a timely lesson about the inherent weaknesses of Globalization.

If you missed Part 1 you can read it here

In Part Two we look at the lessons to be learnt in the lead up to, and during, the COVID-19 crisis, the duplicity of China and the opportunities now possible for this nation to survive and thrive, and withstand future global uncertainties, post COVID-19.

In PART TWO we will cover:

3:0       Supply and demand
3:1       Have previous governments put Australia first?
3:2       China- COVID-19, duplicity or complicity?
3:3       The economic fallout of COVID-19
3:4       Should China be held accountable?
4:0       Coronavirus opportunities
4:1       The Government moves to protect Australians

In PART THREE we will cover:

5:0       Suggested actions required
5:1       Energy supply
5:2       Fuel security
5:3       Water security
5:4       Agriculture
5:5       Australian manufacturing
5:6       Biomedical and Pharmaceutical manufacturing
5:7       Foreign investment controls
6:0       How YOU can help

3:0 SUPPLY AND DEMAND 

Goods manufactured in China may not appear on Australian shelves anytime soon.

In the pre COVID-19 world of Globalization, many Australian businesses moved their manufacturing offshore to take advantage of cheap labor and less government restrictions, are now unable to manufacture these items onshore!

China has been the recipient of huge swathes of manufacturing business from around the world, because of their ‘cheap labor’ and from free trade agreements under the ‘mantra’ of Globalization.

Government’s most critical goal MUST be to ensure the nation’s security and safety of Australians.  Essential supplies are critical in achieving that goal, however without a strong Australian based manufacturing industry this is no longer possible.  Supply of products essential to Australia’s national security are now dependent on other nations, and pre-dominantly – from China.  Globalization’s threat to our supply chain of essential products, national security and safety has become evident during the COVID-19 pandemic.

What has happened for many western nations including Australia, is that over several decades a greater dependence on OTHER nations has been fostered by governments through Globalization.

Empty supermarket shelves

While in peacetime these supply agreements may fulfil their primary purpose, in times of cold or hot war, hostilities, pandemics or civil unrest the same agreements are a direct danger to member nations. For example, interruption of supply to fuel can bring a nation quickly to its knees. (1)

Even under normal peacetime conditions, Australia has just 27 days of petrol reserves according to a government review. The country also has:

  • 21 days’ worth of diesel
  • 23 days’ worth of jet fuel
  • 31 days’ worth of crude oil in storage

Above extracted from the Department of Environment and Energy’s Liquid Fuel Security Review interim report, released in April 2019. The International Energy Agency (IEA) mandates that countries have 90 days stockpile of crude oil, but the chart below shows that Australia falls well short of that target.  On top of this staggering security risk, Australia’s diminishing ability to refine its crude oil is also of great concern.

Without the ability to transport food, equipment, people and resources, Australia is in critical danger both domestically and internationally, should a hostile supplying nation withhold supply. 

Crude Oil reservesRetired Air Vice Marshal John Blackburn, a former member of the Royal Australian Air Force claims the country’s reserves would likely dry up after a week if there was a major disruption to supply.

“Australia’s fuel reserves are all about ‘just-in-time’ logistics delivery. It makes economic sense, but it’s not very resilient,” he said.

In 2018, Senator Molan, a former Major General in the Australian Army said Australia is in ‘real trouble’ when it comes to fuel security and supply

He said: “It happens because for too long we have taken a business as usual approach. It’s like saying we can determine the size and shape of the Australian Defence Force based on commercial factors and making the market decide.”  We stand in real trouble and this is a single point of failure for Australia, very similar to what could happen in a cyber situation,” he told Radio 2GB. (2,3)

3:1 Have previous Governments put Australia’s interests first?

The question needs to be asked – have successive Australian Governments: –

  • Taken ‘risk of supply’ factors into consideration when signing trade agreements; and
  • Made ‘alternative arrangements’ to ensure continuing supply when allowing the sale of essential services (e.g. Energy Grids, Australian Seaports, Water rights and large Agri businesses) to be sold to overseas interests; and
  • ‘Diversified the globalization-model’ to minimize risk if hostilities or disease threaten supply; and
  • Planned sufficiently ahead for food, fuel, energy, water, medical and border security?

We believe the answer is NO.

coronavirus bp oil refinery 

 COVID-19 has now exposed the foolishness and dangers of these decisions.

3.2 China – COVID-19 duplicity or complicity? 

The world must not forget that; had China responded to the outbreak just three weeks earlier than it did, global cases of coronavirus could have been reduced by 95%, according to a study by the University of Southampton.

Coronavirus Xi Jingping

In those three weeks, China was busy hiding the truth. According to Steve Tsang, director of the University of London’s SOAS China Institute,

“It is the cover-up of the Communist Party for the first two months or so which created conditions to generate a global pandemic”. (4)

It is possible that China is waging a double information war: one abroad and one for its own public, both led by the Chinese authorities with President Xi Jinping at its head. They apparently see the West as weak and submissive.

The Chinese government’s duplicity (deceitfulness) and possible complicity (unlawful and morally wrong) in this pandemic should serve as a warning and an opportunity for the West to re-evaluate its ties with Beijing, according to Guy Solman, a French American expert on China. 

Telling quotes and comments about China’s intentions:

  1. In an article in Xinhua, one of the Chinese Communist Party’s mouthpieces, if Beijing threatened to halt pharmaceutical exports, after which “America would be plunged into the mighty sea of coronavirus” Yanzhong Huang, Senior fellow for Global Health, Council on Foreign Relations, Twitter, March 4, 2020
  2. China’s leaders are probably hoping that you cannot challenge a powerhouse that is selling you most of your vital medications. Hidden behind declarations of solidarity, China plans to buy out our troubled companies and infrastructure” Bild March 19, 2020
  3. Italy, a country hit hard by China’s coronavirus pandemic, is now at the centre of a strategic Chinese propaganda campaign. Beijing has sent doctors and supplies to Italy and is doing the same all over Europe. In Italy you can see posters saying; “GO China”” China is trying to buy our silence and complicity. Sadly, that is already taking place.”. China is trying to buy silence and complicity, and sadly, that is already taking place.
  4. China is not helping at this point out of ‘solidarity’. The Chinese regime is now seeking to portray itself as the world’s saviour. Beijing, at the beginning of the pandemic did not care about the lives of even its own people; it was busy censoring the news.
  5. “The west is so tolerant, passive, accommodating and naive towards Beijing. Westerns are seduced like an old man in front of a young girl. Europe shows all its weaknesses. It does not realize that the Chinese offensive threatens its freedoms and values.” Liao Yiwu, Chinese writer exiled in Berlin, Le Point International April 6, 2019 

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China expert; Gordon G. Chang exposes China’s attempts to blame the US for the COVID-19 pandemic.

The Chinese people are angry their government silenced and vilified the eight doctors in Wuhan who found the virus and warned their government. The regime silenced them and hid their evidence.  Globalization then took the virus to every corner of the globe. President Xi Jingping not only has to win favour domestically, but also internationally. Ultimately, China needs to take responsibility and pay reparation.

Understanding China’s intentions and recognizing their duplicity does not mean the end of trade with China. It should mean more ‘measured engagement’ and more efforts from our nation to supply (manufacture) and manage (control) our own ESSENTIAL infrastructure, goods and services. 

3:3    The economic fallout of COVID-19

Nations around globe have been forced into saving lives and livelihoods- and ultimately their nation. The ultimate cost of the China COVID-19 pandemic will play out for decades to come, in nations whose economies have been devastated by this virus. China created this situation; should they be forced to pay for the damage?

Governments around the world are announcing packages to support their economies as the COVID-19 pandemic is placing countries into lockdowns and threatens a global recession. Both central banks and international organizations such as the World Bank and the International Monetary Fund (IMF) are pledging funds to support countries in need. (5)

The United Nations has calculated the worldwide cost. (6)

coronavirus cost to world economies“Apart from the tragic human consequences of the COVID-19 coronavirus epidemic, the economic uncertainty it has sparked will likely cost the global economy $1 trillion in 2020”

 the UN’s trade and development agency, UNCTAD said. (30/03/20)

It is anticipated that China and the United States will react with massive tax cuts and expenditure, however other regions, which were already struggling, may not have the same options.

coronavirus cost to world economyThe experts are predicting that Europe – which has been particularly hard-hit by COVID-19, will most likely slip into recession.

Commodity-rich nations that export raw material ( like Australia) could be hit by a drop in trade and a strengthening of the US dollar.

Please note the careful use of words by Richard Kozul-Wright, Director, Division on Globalization and Development Strategies at UNCTAD.

 “Ultimately,” Mr. Kozol-Wright added, “a series of dedicated policy responses and institutional reforms are needed to prevent a localized health scare in a food market in Central China from turning into a global economic meltdown”. 

This, however, is EXACTLY what has happened!

The economic impact as at 19 March 2020 in USD;

  • The United States, announced a $1 trillion economic package that will include $500 billion in direct payments to taxpayers. The U.S. is also planning $500 billion in loans for businesses. The Federal Reserve announced it will create an emergency lending facility to help the country’s short-term credit market.
  • Canada will spend an initial $18.6 billion in support to families and businesses affected by the outbreak. The country also pledged about $37 billion in tax deferrals to help Canadians and businesses survive the economic trouble.
  • The European Union said it would use up to $41 billion for measures to counteract the economic consequences of the coronavirus crisis. Meanwhile, the European Central Bank announced it will buy up to $830 billion government and corporate bonds and other assets in a bid to calm the continent’s financial markets.
  • In the United Kingdom, the government announced $398 billion for loans and guarantees. Smaller businesses will be granted access to cash grants of more than $28,000 to tackle the coronavirus pandemic.
  • German Chancellor Angela Merkel announced that her country is facing the worst crisis since the end of World War II and said her government will do “whatever it takes” to keep its businesses afloat. The country pledged unlimited cash to businesses hit by the crisis.
  • In France, a country severely affected by the coronavirus outbreak, lawmakers pledged around $50 billion in immediate aid for businesses and employees hit by the pandemic which is expected to shrink the French gross domestic product by 1% in 2020.
  • In Austria, the government announced it will spend up to $42 billion to secure jobs and support businesses. The government will provide up to $10 billion in guarantees and warranties, more than $16 billion in emergency aid and more than $10 billion in tax deferrals.
  • Spain said it will support its economy with a 200 billion euro (about $219 billion) aid package. The country will pay benefits to workers temporarily laid off and will suspend mortgage payments for those affected by the crisis.
  • The Netherlands will provide up to $22 billion to businesses as part of an emergency package in an effort to help workers and lower the impact of the COVID-19 crisis.
  • Italy, the country most severely affected by the coronavirus pandemic in Europe so far, has adopted an emergency plan of $28 billion to support its economy. The measure is necessary in order to soften the blow taken by a society forced to shut down in a national quarantine.
  • Portugal will also spend $10 billion on an emergency package. About $5.6 billion will be used as fiscal stimulus, $3.2 billion for state-backed credit guarantees and about $1 billion for social security payments.
  • Norway will offer companies at least $9.7 billion in funding in order to guarantee loans and bond issues to support business and the economy. Also, payments of payroll taxes can be postponed.
  • While no specific measures have yet been announced for Ireland, the country pledged more than $3 billion earlier this month to fight against the health crisis and support sick pay and business affected by COVID-19.
  • Sweden also launched a coronavirus crisis package of more than $30 billion. The country is looking at paying for sick leave through the months of April and May and supporting the cost for temporary redundancies during the crisis.
  • Denmark also released $30 billion for banks to lend to businesses during the pandemic.
  • Australia’s government announced it is lowering interest rates while also injecting about $56 billion (this has since been increased)  into the economy, Reuters reported.
  • In Japan, the government passed a $10 billion package earlier in March for small and medium-sized businesses, as well as self-employed workers affected by the coronavirus. The government on Thursday formed a panel of ministers to examine a broader package to help the economy.  

 

Venetian gondoliers sit idle

Venetian gondoliers sit idle


Deserted streets in mainland China

Deserted streets in mainland China

  

3:4    Should China be held accountable?

The Chinese Communist Party (CCP) is waging a ferocious, global propaganda campaign designed to deflect blame for the origin and spread of the COVID-19 outbreak from Wuhan, China. Moreover, Beijing is trying to take advantage of the pandemic to increase its global standing and influence.  (7)

There are three main reasons why the world must hold the CCP accountable for the first global pandemic in a century.    

  1. MORALITY AND TRUST; The CCP must be held accountable for the pandemic because morality demands it. General Secretary Xi Jinping’s regime has refused to accept responsibility for allowing the epidemic to spread uncontrolled, first in Wuhan, then throughout China, and finally beyond its borders to the rest of the world. Though not yet confirmed, it is suspected the mortality rate in Wuhan is around 46,000 deaths – much higher than reported. It can no longer be denied that Xi’s regime is a danger to the world. Justice demands it be held morally culpable for its dangerous and callous behaviour.
  2. GLOBAL GOVERNANCE AND POLITICS; The CCP’s actions have gravely undermined global political governance. China was morally and legally bound, as a party to the 2005 International Health Regulations, to ‘provide expedited, timely, accurate, and sufficiently detailed information to the World Health Organization, about potential public health emergencies’ such as the coronavirus. Beijing actively misled the WHO about the crucial fact that the pathogen was transmitted between humans. The result is that Xi can no longer credibly claim the CCP adheres to international law, and that the corruptibility of long-standing intergovernmental organizations such as the WHO is more apparent than ever. CCP is undermining the liberal international architecture and suborning global institutions to its will. The normalization of such misbehaviour cannot be allowed to stand.
  3. EFFECTIVE PROTECTION AGAINST THE NEXT PANDEMIC; Beijing must be held responsible to prevent another pandemic from ravaging the world in the future. As we saw in the 2014 Ebola outbreak in Dallas, Texas, and are seeing again now, that the era of globalization has allowed once-isolated pathogens to leap across national boundaries. 

The Chinese Government is hastily attempting to re-write history and deflect blame.

Coronavirus Porf James Curran

Prof James Curran

‘Beijing, meanwhile, is rewriting the story of the virus — for China and against the U.S.A.  China’s state system has launched a blatant global campaign, part propaganda and part practical action, burying its initial responsibility for the virus and casting itself as the pandemic saviour.  In an age when truth is disputed, this looms as an epic battle over truth’.

Historian James Curran  from the University of Sydney, has weighed into the debate telling The Inquirer:

“Those pushing the China threat narrative in Australia are already conflating the coming of the virus with older rhetoric about a Fortress Australia. These are short-term judgements made out of the emotion of the moment and Morrison will need to ensure such ­voices do not sidetrack him”.  (8)

At the same time, Professor James Curran seems to ignore China’s aggressive global expansionism and ‘chest beating’.  E.g. The building of artificial islands for military bases in the South China Sea (and claiming sovereignty) has drawn international criticism

Spratly Is Sth China Sea

Spratly Is Sth China Sea

Chinese Military Bases on disputed territory; Spratly Islands, South China Sea

China’s expansionism in the South China Sea is in an area of international waters where 30% of the world’s shipping transits. In 1973 the United Nations instigated the EEZ = Exclusive Economic Zone for all nations. The EEZ sets a 200 nautical mile zone for ownership of the resources within the zone.  China, however, does not recognize the EEZ and instead lays claim to most of the area within the South China Sea.

Please watch the video below to dispel any doubt of China’s domination and expansionist actions, now from a position of global economic power.

China has continued to ignore International Obligations and Treaties and has acted as a ‘law unto itself’. China MUST be held accountable for the spread of COVID-19

 4:0   CHINA-CORONAVIRUS OPPORTUNITIES

The China Coronavirus has FORCED Australia to consider critical ‘safety and supply issues’, but it has presented an opportunity for change.

The PM Scott Morrison said on Friday 27th March:

“The coronavirus crisis is not just a health emergency and not just an economic crisis, it is more the kind of seismic global disturbance brought about by a sudden world war’ (5) 

Already we are witnessing some states understanding the critical issue of supply restriction, brought about by COVID-19 in the time of Globalization.

gladys berejiklian

Gladys Berejiklian

NSW Premier Gladys Berejeklian is calling for NSW industries to ‘tool up’ and start producing much needed medical supplies – that would normally be sourced overseas.

Premier Berejiklian issued a direct appeal to businesses to reorient their operations, as supplies from overseas had dried up.

NSW relied on many different sources of equipment, including many from overseas, which no longer exist or have been massively disrupted.  I’m calling on the great people of our state, those great business people, those manufacturers who are able to re-tool, to consider re-tooling, to help supply the additional things we need in coming months.” Ms. Berejiklian said. (9)

Increasingly, we will see more Australian businesses step up to the challenge of production to help supply the nation with essentials goods. Globalization in the time of this worldwide pandemic has proven its inherent weakness.

If Australian businesses can manufacture essential items in times of global uncertainty, they can supply the nation in times of stability, creating more jobs and prosperity, for Australia.

4:1 The Government moves to protect Australians

Prime Minister Scott Morrison

Prime Minister Scott Morrison

The Federal Government has already implemented wide-ranging economic relief and social measures, in an effort to minimize the impacts of COVID-19.

A multi billion dollar bailout of corporate Australia — including loan extensions and partial government takeovers — will be included in a third stimulus package to keep tens of thousands of people employed during the pandemic, as the commonwealth launches a blockade of foreign raids on struggling Australian companies.

As Scott Morrison prepares to unveil his government’s third and biggest economic rescue package, the banks have agreed to extend the six-month deferral of loan ­repayments to 30,000 businesses, taking the overall value of loans for coronavirus support to $250bn. 

 

On Monday 30 March, the treasurer moved to stop the ‘corporate raiding’ of Australian businesses by ‘opportunistic’ overseas investors. (10)

Josh Frydenberg has also moved to prevent foreign companies, including Chinese enterprises, from raiding Australian-owned businesses by reducing ownership thresholds that trigger government scrutiny to zero.

The Treasurer said all proposed foreign investments into Australia would now require approval “regardless of value or the nature of the foreign investor”.

The current worldwide pandemic will change forever the way communities and governments now view ‘globalization’. When managed properly; being part of a global village has helped millions out of poverty in developing nations and given developed nations people access to cheaper goods.  However, as we now are witnessing, globalization has caused many Australian businesses to move overseas, many Australian jobs have been lost and Australia has become a nation of miners, baristas and bar tenders.

Australia has stopped manufacturing, or in many instances, of practising a vertically-integrated business model, because of Globalization. Instead, we are relying evermore on mining our finite resources for the nation’s wealth, without protecting our economy by diversification. Gone are our core industries and our ability, as a nation, to withstand global shocks akin to a sudden world war!

Australia MUST be able to move itself, feed, manufacture and defend itself, while simultaneously trading as a global partner.

In Part 3 we will look back at the impacts of Globalization in Australia, discuss counter arguments about Globalization, and examine the opportunities this pandemic offers Australia.


References:

 

  1. https://www.news.com.au/finance/economy/australian-economy/australia-has-18-days-worth-of-petrol-in-case-of-emergency/news-story/56d02e01ca3fc0c2b87a5703777175e3
  2. https://www.theaustralian.com.au/nation/politics/molan-issues-warning-over-australias-fuel-reserves/news-story/6fe238dc4caa73be391066228a918349
  3. https://www.theaustralian.com.au/inquirer/coronavirus-morrison-is-first-among-leaders-as-world-order-changes/news-story/2760be6db82d68fe33525ef7c5fcd0e1
  4. https://www.gatestoneinstitute.org/15804/china-duplicity
  5. https://www.usnews.com/news/best-countries/articles/2020-03-19/increasing-number-of-countries-push-coronavirus-rescue-packages
  6. https://www.weforum.org/agenda/2020/03/coronavirus-covid-19-cost-economy-2020-un-trade-economics-pandemic/
  7. https://www.nationalreview.com/2020/03/coronavirus-pandemic-china-must-be-held-accountable/
  8. https://www.theaustralian.com.au/inquirer/coronavirus-its-masks-on-gloves-off-for-trump-and-xi/news-story/3ab57a1111483252987a542c66c42e41
  9. https://www.smh.com.au/national/nsw/nsw-premier-calls-for-businesses-to-re-tool-make-medical-supplies-20200401-p54fuv.html

https://www.abc.net.au/news/2020-03-29/foreign-investment-restrictions-australian-assets-coronavirus/12101332

Acknowledgement of NationWe acknowledge the Aboriginal and Torres Strait Islander peoples who have lived here since the Dreamtime.  We acknowledge the explorers and pioneers and their descendants who planted the British flag and Christian values on this continent, creating the Australian nation.We acknowledge the Federal Commonwealth of Australia, created by the nation, under the Crown, to guard the liberty of ALL our citizens and we acknowledge those ‘New Australians’, who came here for a better future, and made this nation strong and prosperous.

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