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Business

China has to make sure its economic recovery lasts


In China’s post-COVID economy, there may be hope for the struggling private sector made up of millions of small businesses. It needs to stay that way.

Unlike previous recoveries, fixed asset investment in the private sphere is rising, continuing an upward trend by climbing 9.1 per cent in September compared to a year earlier, while growing at a slower pace in the public sector after declining in the previous month. Manufacturers of cars and other industrial equipment, for instance, are consuming more power and their profits are rising, too. That’s a turnaround from the lows private enterprises (more so than their state-owned peers) hit in February, when cash was tight and many were pushed to the brink.

China's economy has bounced back strongly in the wake of the coronavirus. Its leaders now have to make sure it is sustainable.

China’s economy has bounced back strongly in the wake of the coronavirus. Its leaders now have to make sure it is sustainable.Credit:Getty

There are other signs of improving financial health. A look at the prospectus of credit facilitator Lufax Holding shows that in the third quarter, the ratio of overdue loans as well as delinquency rates improved significantly. Lufax, backed byPing An Insurance Group Co., is one of the largest non-financial service providers, with about around 300 billion yuan ($62 billion) of loans outstanding to small firms. At Jack Ma’s Ant Group., delinquency rates over the past year tapered off and have plateaued at around 2 per cent to 3 per cent.After plunging earlier this year, employment is beginning to look better. Small and medium firms account for around 80 per cent of urban jobs. This matters. The government is generally thought to be able to engineer recovery for state-owned enterprises. In fact, it can actually do the same for the private sector, which accounts for more than 60 per cent of gross domestic product, 75 per cent of industrial production and 60 per cent of fixed asset investment, according to analysts from HSBC.

Over the next couple of weeks, Beijing will unveil the latest five-year plan – a blueprint for how it will steer the economy, including an indication of priority sectors and where money will go. Innovation and all things automation will be front and center. The private sphere and small businesses – which are more efficient on a return-on-assets basis – are what’s needed here. In keeping with that, robot production volumes are up sharply over the last six months.



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Crown’s ex-chair Rankin faces ASIC referral over China arrests, Packer threat


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Mr Aspinall said in the absence of any explanation from Mr Rankin about his actions, Commissioner Patricia Bergin was open to find that he failed to notify his co-directors about his concerns – revealed in an email to executives – that Crown should be on “high alert” to the risk of staff being arrested in China, and had failed to follow up on that email to ensure Crown was taking steps to protect staff.

Mr Rankin had also failed to notify his colleagues on the board of the serious threat Mr Packer made in November 2015 to Melbourne businessman Ben Gray after a deal to privatise Crown soured, Mr Aspinall said.

“In those circumstances you may determine to recommend to the Independent Liquor and Gaming Authority that it consider referring Mr Rankin to ASIC for investigation for possible breaches of section 180 of the Corporations Act,” Mr Aspinall said, referring to laws covering company directors’ duties.

Mr Aspinall said a referral would be on the basis that “Mr Rankin, as the chairman of a public company, failed in his obligations of due care and diligence to alert the full board of the need to elevate its concerns for its staff in China to a significant risk and to act accordingly to protect them from arrest by the Chinese authorities”.

“Secondly, Mr Rankin…failed in his obligations of due care and diligence to advise the full board of the serious threat that had been made by one of its co-directors, Mr Packer”.

Mr Aspinall told the inquiry that Mr Rankin was in England and had refused to provide written evidence and contended that the inquiry did not have the power to serve him with a legal notice.

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China; Andrews seeks Chinese tech precinct ‘torch centre’ for Melbourne


“Victoria is proud to have signed a Belt and Road agreement with China. Victoria is ready to make tangible progress under the MoU and we would like to take the opportunity to explore practical measures of collaboration with the ministry,” Mr Andrews wrote in his letter to Mr Wang.

Torch centre overseas facilities “assist Chinese technology companies in establishing their presence in foreign markets,” the briefing said, adding that, under a proposed Cooperation Agreement, the “complementary research and innovation capabilities” of China and Victoria would increase commercial opportunities through research and development.

Mr Andrews’ desire for a high-tech Chinese presence in Melbourne is detailed in dozens of pages of documents about Victoria’s Belt and Road Initiative dealings that have been released by the Premier’s Department under the Freedom of Information Act.

But South Australian independent senator Rex Patrick said Victoria’s offer looked “remarkably naive” in the context of China’s history of intellectual property theft, and a former head of China analysis at Australia’s Defence Department, Paul Monk, said he was worried about Australia being pulled into China’s “sphere of influence”.

Australia has welcomed Chinese investment over many years, but strong debate has arisen in the past two years over questions of Communist Party influence, particularly around President Xi Jinping’s Belt and Road Initiative, which is increasingly seen by its critics as an instrument of China’s foreign policy.

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Prime Minister Scott Morrison has promised to legislate to give him the power to tear up agreements between states and foreign powers, but Mr Andrews has seen the Belt and Road agreement as a creator of jobs in Victoria, with a particular focus on transport infrastructure such as the Suburban Rail Loop and manufacturing, such as the controversial high capacity trains.

On Friday he said, “I think a strong relationship and a strong partnership with China is very, very important.”

In 2016, the University of New South Wales became the first institution outside of China to establish a torch centre through a $100 million partnership with the Chinese Ministry of Science and Technology.

The deal was signed with the approval of the Turnbull government, but it attracted strong criticism from security analysts in Australia and the United States because the Chinese government was able to direct the university about which companies it was to work with, including Chinese technology giant Huawei and several others whose technologies may have had military use.

Australian security and intelligence agencies have repeatedly advised the federal government to block Huawei from involvement in the rollout of the National Broadband and 5G networks on security grounds.

Australian Prime Minister Malcolm Turnbull and Chinese Premier Li Keqiang at a special signing ceremony between UNSW and the Ministry of Science & Technology for a Torch facility.

Australian Prime Minister Malcolm Turnbull and Chinese Premier Li Keqiang at a special signing ceremony between UNSW and the Ministry of Science & Technology for a Torch facility.

Another collaboration had the UNSW Torch Centre working with researchers from China’s University of Defence Technology. UNSW vice-chancellor Bryan Boyle said in 2017 the university “goes to great lengths to work within Australian government regulations to ensure our national security is protected”, and that “all of our work satisfies the Commonwealth Defence Trade Controls”.

Former head of China analysis at Australia’s Defence Department, Paul Monk, said Victorians deserved more transparency from Mr Andrews about his Belt and Road dealings with China, in particular proposals for official Chinese government projects in Melbourne.

“People will say other countries do comparable things with technology and research collaboration like the Americans, British or Israelis and that’s true. But the objection to China is based not on racism but regime grounds,” Mr Monk said.

“This is an increasingly aggressive and disturbing regime that will attempt to use the Belt and Road to subordinate us to its sphere of influence and detach us from the US alliance. To think otherwise is wilfully blind.”

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Senator Patrick said the FOI documents revealed an “extraordinary case of a state government pursuing a shadow foreign and trade policy, quite separate and independent from the federal government”.

“The Victorian government’s enthusiasm to enmesh Chinese state-owned enterprises with the Australian economy – including critical infrastructure and virtually every area of Australian technological excellence – is particularly striking,” Senator Patrick said.

“Given the widespread evidence of industrial scale, state sponsored and directed intellectual property theft by China, the Victorian government’s interest in the Chinese Ministry of Science and Technology establishing a so-called ‘Torch Centre’ in Victoria at best looks remarkably naive.”

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Mr Andrews’ October 2019 China trip also involved his presence at a signing ceremony to extend a cooperation agreement between Melbourne’s Monash University and the Commercial Aircraft Corporation of China (COMAC).

The Age and The Sydney Morning Herald earlier this year revealed concerns about this partnership within senior levels of the federal government due to concerns COMAC had engaged in alleged industrial espionage in its bid to rival Boeing and Airbus as a producer of commercial jets.

Cyber security firm CrowdStrike reported in 2019 that industrial espionage linked to COMAC included cyber-attacks, forced technology transfer and theft from global component suppliers.

COMAC’s agreement with Monash will lead to a new research and development centre at Monash’s Clayton campus geared towards advanced manufacturing, artificial intelligence and robotics.

Monash has defended the China partnership, saying research collaboration with international partners were subject to strict rules.

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Business

Crown boss admits failures over China arrests


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Giving mostly yes/no answers, Mr Alexander agreed with counsel assisting the inquiry Adam Bell there had been failures in Crown’s risk management process that meant a series of red flags about the dangers to its China staff were ignored.

They included that the Chinese government announced a crackdown on foreign casinos luring its citizens abroad in early 2015; a Crown executive telling the head of Crown’s international VIP business in an email that staff in China were “living in constant fear” of being arrested; and that Chinese police detained and questioned a Crown staff member in Wuhan on suspicion of illegally arranging overseas gambling tours.

Mr Bell asked Mr Alexander whether the fact Michael Johnston, a Crown director and representative of major shareholder James Packer, knew a Crown staff member had been questioned but did not share that with the rest of the board “suggests a corporate governance problem”.

“Yes,” Mr Alexander replied.

The inquiry, which was sparked by last year’s media reports, is considering whether Crown should be able to keep the licence for its new casino at Sydney’s Barangaroo, which is due to open in December.

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Australian News

China blows up after Australia raided the homes of Chinese journalists


China has accused Australia of double standards after intelligence agencies raided the homes of its foreign journalists in June.

The comments follow two Australian journalists fleeing China with help from Australian officials after state police knocked on ABC reporter Bill Birtles’ door at midnight to inform him he was involved in a case.

Foreign Ministry spokesman Zhao Lijian has condemned Australian authorities for saying Beijing was engaging in “hostage diplomacy”, while questioning Chinese journalists was normal procedure.

“It fully revealed some Australians’ unfounded sense of superiority, hypocrisy and double standards,” Mr Zhao said.

Australian intelligence officers reportedly raided, searched and questioned in June four journalists who worked for the Xinhua News Agency, China Media Group and China News Service in Australia.

Mr Zhao said they were probed over the possible violation of foreign interference laws.

Computers, mobile phones, educational tablets and children’s electronic toys were seized from the premises.

“The Chinese journalists were threatened, intimidated and not allowed to contact the local Chinese consulate-general,” he said.

Mr Zhao defended the handling of two Australian journalists, saying it was “in accordance to the law”.

He dismissed allegations the journalists were forced out of China, saying it was the Australian embassy that asked them to leave Beijing as soon as possible and arranged their stay in the Australian diplomatic premises.

“They amount to disruption in the Chinese side’s lawful investigation and interference in China’s domestic affairs and judicial sovereignty,” he said.

But Trade Minister Simon Birmingham defended the Australian embassy’s actions saying it provided the support Australians would expect if people were in trouble.

“Our view is that our officials acted appropriately, they ensured the safety of the two Australians involved and they resolved the matter diplomatically through discussions with Chinese authorities,” Senator Birmingham told ABC.

On the June raids, Senator Birmingham said the government took foreign interference matters very seriously.

“But we undertake these matters in no way in response to actions of other countries. We do it purely in relation to the evidence that may be there, the concerns that our agencies have, and they act then on those individual cases and matters,” Senator Birmingham said.

He did not have further information about Australian journalist Cheng Lei, who remains detained in China.



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Australian News

Trilateral trade agreement that could change Australian relations with China


As the sands of the global geopolitical landscape continue to rapidly shift amid coronavirus and the subsequent economic crisis, fault lines in trade and diplomatic relationships have returned to the forefront once more.

For well over a decade, federal governments from both the major parties have insisted that Australia could continue to walk the fine line between its security relationship with the US and its strong trade ties with China.

But now, as Australia’s trade relationship with Beijing continues to deteriorate, Canberra is increasingly looking to reduce its heavy economic dependence on exports to China.

Recently it was announced that the Morrison government would be seeking veto powers of all public deals with foreign nations, including existing agreements made by state governments and universities.

It is expected that the Morrison government will likely use the new powers to terminate the Victorian state government’s participation in China’s ‘Belt and Road’ initiative.

This initiative is Beijing’s global infrastructure program designed to link China to the world and foster the spread of Chinese influence.

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The Morrison government’s actions are likely to further agitate a Beijing that is already frustrated with Canberra’s increasing acts of defiance.

As tensions continue to flare across the Indo-Pacific, Australia is not the only nation looking for alternatives to help ensure the stability and security of vital supply chains.

It was recently revealed that India, Japan and Australia were moving toward a trilateral effort to ensure global supply chains and reduce their dependence on China, with the prospective pact to be called the Supply Chain Resilience Initiative (SCRI).

Informal talks between New Delhi and Tokyo have been ongoing for around a month, according to economists with knowledge of the ongoing dialogue.

Australia has not yet formally agreed to join the initiative, but talks are ongoing say sources in New Delhi and Tokyo.

STRAINED RELATIONSHIPS

With China consuming a record 48.8% of all Australian exports and the trade relationship between Beijing and Canberra becoming progressively more strained, it’s increasingly clear an alternative is required.

Beyond increasing trade between India, Japan and Australia, the initiative may have wider scope, according to Mark Goh, National University of Singapore Business School professor and director at the Logistics Institute-Asia Pacific.

“Japan has a manufacturing presence in India, traditionally through the automotive sector. While India sees this as an opportunity to enter Australia and Japan through their pharmaceuticals, and serve as a hub for Australian and Japanese products into the Middle East and Africa, which should temper China’s trading presence in that part of the world,” said Goh.

He went on to speculate that the initiative could eventually come to include the 10 members of the Association of Southeast Asian Nations (ASEAN).

RELATED: Inside state’s controversial China deal

WASTING NO TIME

Unlike a garden variety trade agreement which can sometimes take over a decade to be put into place, the Japanese government is eager to bring this initiative to life as quickly as possible. With sources stating that Tokyo was in favour of launching the initiative as early as November.

Australia and India are also wasting no time, with Canberra and New Delhi coming to an agreement to work together to diversify their supply chains earlier this year.

As part of the Japanese government’s stimulus package to drive an economic recovery from the pandemic, $AUD3 billion has been set aside to incentivise Japanese companies to shift their production out of China.

Last month $AUD746 million in subsidies were offered to 57 companies to invest in production in Japan, with a further 30 companies offered subsidies to invest in operations in various South East Asian nations.

DEADLY CLASHES

In recent months, China’s increasingly aggressive posturing has resulted in multiple incidents across the region. In May and June, tensions between India and China boiled over into deadly clashes between their respective armed forces along the disputed border.

Meanwhile in the South China sea last week, Beijing engaged in the launch of missiles into the ocean, including what Chinese sources call an “aircraft-carrier killer” missile as a ‘warning to the United States’.

The incident is reminiscent of the missile tests and provocative missile launches undertaken by North Korea over the past few decades, rather than the normal displays of strength analysts have come to expect from Beijing.

THE ROAD AHEAD?

With the geopolitical landscape continuing to evolve with each passing day, Australia now finds itself at a crossroads that may help define its economy’s future.

On the road behind us, a problematic and heavy reliance on a single at times belligerent trade partner consuming almost half of all Australia’s exports.

On the road ahead, the opportunity to become a founding part of a pact that could potentially alter the global balance of economic power and begin to reduce Australia’s reliance on Beijing to drive its economy

AUSTRALIA’S UNIQUE OPPORTUNITY

Australia likes to remind the world its own importance, that our little corner of the South Pacific matters to global affairs. With the advent of this potential pact, it may get that chance.

Australia may have a unique opportunity in its midst to seize control of its destiny on a global stage, to become a founding part of something greater.

This in turn could drive the recovery of our economy and begin to reduce our dependence on Beijing once and for all.

Tarric Brooker is a freelance journalist and social commentator | @TarricBrooker





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Business

To deal with China, Trump should learn German


“The reason that the United States was on the winning side of the three great conflicts of the 20th century — World War I, World War II and the Cold War,” said Michael Mandelbaum, author of “The Rise and Fall of Peace on Earth,””is that we were part of the strongest coalition. The World War I coalition we joined belatedly. The World War II coalition we joined less belatedly. The Cold War coalition to defeat the Soviet Union, we organised. This should have been the model for dealing with China.”

If we make this a story of America acting against China alone — with the goal of making America, and only America, great again — we lose. If we make this a story of the world versus China on what are the right and fair rules of 21st-century commerce — we can bend Beijing our way.

As a friend of mine who does business in China likes to say: Trump is not the American president America deserves, but he is the American president China deserves.

Trump had to impose billions of dollars in taxes on US imports from China — and force US farmers to live with China’s retaliation of curtailed American agriculture purchases — just to compel China to promise to buy more US goods. But he still did not secure a sustained opening of China’s economy for truly reciprocal commerce.

As The New York Times reported on Tuesday, “since signing the deal, China has taken steps to open its markets to American banks and farmers, but its purchases of American products are far behind”— more than 50 per cent —”its promise to buy an additional $US200 billion by the end of next year.”

Trump has been tougher on China than any previous president, and rightly so in my view. As a friend of mine who does business in China likes to say: Trump is not the American president America deserves, but he is the American president China deserves.

But I prefer not to use the term “China.” I prefer “1.3 billion people who speak Chinese.” Because the behaviour of those 1.3 billion Chinese speakers, whose economy is growing very dynamically, is not easily modified by 328 million Americans operating on Trump’s America-First-America-Alone strategy.

Trump’s huge mistake

Which is why I thought it was a huge mistake for Trump to be simultaneously hammering China and bashing Germany over European Union auto tariffs and Berlin’s lagging military spending. Trump should have prioritised a partnership with Chancellor Angela Merkel of Germany — also known as “the Chancellor of Europe”— who is as concerned about China’s bullying as we are.

Germany has a small army that would be useless in a shooting war against Russia, but it is a manufacturing superpower that would be a decisive ally in a trade war against China.

“We share your grievances with China, but why has Trump never tried to address them with your European allies?” a veteran German diplomat asked me.

Now Trump is also punishing Germany by bringing home some of our troops there. The result? Pew Research reported in May that in 2019, Germans prioritised their country’s relationship with the United States over that with China, 50 per cent to 24 per cent. Today, 37 per cent of Germans prioritise their country’s relationship with the United States and 36 per cent prioritise relations with China.

Germany has a small army that would be useless in a shooting war against Russia, but it is a manufacturing superpower that would be a decisive ally in a trade war against China.

So, do the math: On taking office, Trump tore up the Trans-Pacific Partnership agreement, which set the rules for free trade in the 21st century in line with US interests and was supported by the 12 biggest Pacific economies — excluding China. And now he’s weakening ties with Germany.

Then, in the middle of all of this, Trump’s secretary of state, Mike Pompeo, gave a speech declaring that “securing our freedoms from the Chinese Communist Party is the mission of our time,” therefore it is also time “for a new grouping of like-minded nations, a new alliance of democracies” to deter China.

“If the free world doesn’t change,” Pompeo went on, “Communist China will surely change us.”

That speech left me speechless. It’s hard to have an alliance without allies.

‘Mission of our time’

If managing Communist China is, truly, “the mission of our time,” then wouldn’t you set aside nickel-and-dime complaints about German defence spending aimed at Russia — a third-rate power best known for selling vodka, caviar and oil and gas — to enlist the whole European Union on our side?

It is true that the EU countries are wary of getting caught in the crossfire between Washington and Beijing — or of having to choose between an American or a Chinese technology ecosystem. Nevertheless, last year the European Union labelled China a “systemic rival”— much to the chagrin of the Chinese, who are currently trying to divide and buy off Eastern Europe from its Western brethren.

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The thing China fears most is the one thing Trump refused to build — a united coalition that includes the Trans-Pacific Partnership, the United States and the European Union, built around Washington and Berlin.

Economist Tyler Cowen put it well on Bloomberg View the other day: The Trump China hawks “were right about everything, except how to deal with China.”

The great grand strategy chess move of the 1970s was Richard Nixon and Henry Kissinger building an alliance between China and America to contain the Soviet Union.

The great grand strategy chess move today is building an alliance between the United States and Germany to counterbalance China.

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Australian News

Scott Morrison’s unveils new power to block deals between China and states


Scott Morrison will unveil new powers to block secret deals between foreign powers including China with state governments and universities amid rising concern over espionage.

Just hours after one of China’s top diplomats insisted secretive deals with academics in Australia’s universities were simply designed to “spread sunshine”, the Prime Minister will argue urgent reforms are required.

The new test will ask whether or not the proposed arrangements adversely affect Australia’s foreign relations and whether it is inconsistent with Australian foreign policy.

If the arrangement fails the test the foreign minister will have powers to stop the state entity from negotiating, entering, remaining in or giving effect to any new arrangements.

“Australia’s foreign policies and relationships must always be set to serve Australia’s interests,” Mr Morrison said.

“One of the most important jobs of the Federal Government is to protect and promote Australia’s national interest.”

The reforms also follow concerns over Victoria’s Belt and Road initiative to build infrastructure in the state.

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The Federal Government will also have powers to terminate private contracts and other agreements, as well as infrastructure construction contact that comes about as a result of the Victorian Belt and Road initiative program.

Within six months of the introduction of the new laws, states and territories, local councils and public universities will have to complete a stocktake, and notify the Commonwealth of their existing arrangements with foreign governments.

But the changes will not come as a surprise to state premiers who were briefed on the proposed reforms in recent weeks.

“I recently arranged for all premiers and chief ministers to receive a comprehensive national security briefing. It is vital that when it comes to Australia’s dealings with the rest of the world we speak with one voice and work to one plan,” Mr Morrison said.

Under the proposed changes, Foreign Minister Marise Payne will have the power to review any existing and prospective arrangements between state and territory governments and all foreign governments.

“It is vital for Australia’s prosperity, security and sovereignty that our foreign policy is driven by our national interest,‘’ she said.

“There is currently no legislative requirement, nor clear understanding, that states and territories consult properly with the Commonwealth on arrangements with foreign governments.”

RELATED: Kevin Rudd warns of ‘hot war’ between China and the US

In a rare address to the National Press Club on Wednesday, China’s Deputy ambassador Wang Xining was quizzed about the “Thousand Talents Plan” that recruits top scientists from around the world including Australia.

“The scientists are trying very hard to spread sunshine over our relationship,” he said.

“It’s up to the scientists to decide where to work, who to collaborate with. I’d rather see the sunny side of our co-operation in technology and science.

“It has brought, and it will bring, enormous good to our business, to our society and to our people.”

The Australian newspaper revealed this week that the Chinese government is ­actively recruiting leading Australian scientists for a secretive research program that offer lucrative salaries and perks.

But the secretive deals require researchers’ inventions to be patented in China.

In the United States, the FBI has raised concerns the program represents economic espionage and a national security threat.



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Australian News

China ‘propaganda’ textbook recalled from sale in Victoria


A textbook used in Victorian schools that promotes Chinese territorial claims rejected by both Australia and under international law has been recalled by the publisher.

More than 600 copies of the book on Chinese culture have been sold in the state, which also includes passages that promote Chinese Communist Party propaganda.

The publisher, Cengage Learning Asia, has said it will recall all unsold copies of the book titled Chinese Language Culture and Society.

Within the book is a map of South East Asia simply called a “map of China”. However, the diagram includes China’s highly controversial so-called “nine dash line”.

This maritime boundary extends as far as the seas off Malaysia and puts scores of islands in the South China Sea, some administered by other nations, within territory claimed by Beijing.

This boundary is disputed by countries that border the South China Sea as it puts waters near their coasts into Chinese hands. Fishing vessels from a number of South East Asian nations have been harassed by Chinese ships in the area.

The United Nations has ruled that Beijing’s maritime claim has no legal basis and Australia has rejected the nine dash line.

The map also appears to show Taiwan as a province of Communist China. While Beijing covets Taiwan, it has been a de facto independent nation since 1949, is democratic and has never been ruled by China’s Communist Party.

The erroneous map was discovered by the University of Melbourne’s Citizen publication.

As well as the map, the book also included passages that said China can only progress when the “nation is united and led by a strong government” and the way ahead was a “democracy under a socialist system with Chinese characteristics”

The phrase “socialist system with Chinese characteristics” is heavily promoted by the Chinese Communist Party (CCP) and essentially means a one-party controlled economy and political system but with some aspects of capitalism.

Another extract from the book states that the Chinese view notions of political freedoms as “unfeasible” in such a large country and instead the people “value a strong central government”.

This is despite the fact the world’s second largest country, India, is a democracy.

Talking to The Guardian, Swinburne University’s Professor John Fitzgerald said the passages were straight out of the CCP “playbook”.

“Much of the book is innocuous, but what is presented in these passages and the map is an unvarnished Chinese Communist Party view of the world which has no place in a ‘textbook’ anywhere outside China.”

Almost 40 Victorian schools teach subjects in Chinese language, culture and society that could potentially make use of the book. However, it is not a text that state education authorities have said must be studied.

A spokesman for Cengage told The Guardian 633 copies of the textbook had been sold in Australia. It apologised for printing the disputed map and said it would recall all copies in stores and republish the book with a less contentious map of China.

However, the publisher argued that presenting Beijing’s view of the world without criticism was not “propaganda” but rather “background information” to illustrate China’s current political situation.

Australia stoked Beijing’s ire in July when the Government formally rejected China’s nine dash line claims.

China wasn’t impressed and through the pages of The Global Times newspaper, whose editorial line is in lock-step with the CCP, it said Canberra was “recklessly making provocations”.

The article said sanctions on Australian beef and wine exports were warranted and warned broken diplomacy between the two countries was almost unsalvageable.

“The relationship between China and Australia has now deteriorated to a very bad point and the chance for a turnaround is slim in the near future,” according to the article penned by Guangdong Research Institute professor Zhou Fangyin.

“One of the main reasons is that Australia’s policy lacks independence and its current choice is to closely follow the US lead.

“If Australia further provokes China, not only on political relations, but also economic relations, the damage to Australia should be expected.”

The diplomatic relationship between Australia and China soured when Canberra led calls for an international investigation into the initial outbreak of the coronavirus pandemic that is thought to have begun in the Chinese city of Wuhan.

The increasingly fraught war of words flirted with aggression in July when five Australian warships were reportedly confronted by the Chinese navy near the Spratly Islands in the South China Sea.

The map in Cengage’s textbook puts these islands solidly within Chinese territory.



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China launches anti-dumping investigation into Australian wines


China has launched an anti-dumping investigation into Australian wine exports in a massive blow for the industry.

The move effectively accuses Australia of flooding China with cheap wine in an effort to skew the market.

Australia’s largest wine exporter, Treasury Wine Estates, was brought to a trading halt on Tuesday as its share price tumbled 19 per cent.

It’s the latest blow in an apparent trade war between China and Australia.

In a statement, Treasury Wine Estates said it would co-operate with “any requests that we receive for information from Chinese or Australian authorities”.

The winemaker said it had “a long and respectful relationship with China over many years” through its team, partners, customers and consumers.

“As an importer of high-quality premium Australian wine including brands such as Penfolds, TWE remains committed to China as a priority market and will continue to invest in its Chinese business and its relationships with customers and consumers,” it said.

The Chinese Ministry of Commerce announced the anti-dumping investigation of Australian wine exports in China on Tuesday.

It is the second blow in a matter of months for Australian exporters, after China announced it would slap tariffs on Australian barley.

Treasury Wine Estates last week said volumes sold in the Chinese market had risen 40 per cent in June compared to the previous corresponding month.

Relations between Canberra and Beijing soured this year when Australia pushed for an independent inquiry into the coronavirus pandemic.

China implemented a series of seemingly retaliatory policies including urging its citizens not to travel to Australia.

Earlier this year Trade Minister Simon Birmingham demanded an explanation after reports China was preparing a “hit list” of Aussie exports to punish Australian farmers.



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