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Can China’s economy recover?

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Once accustomed to economic growth of more than 7% for a long time, and accounting for 15% of global trade in 2020, China has suffered from an unprecedented real estate and trust crisis after the severe quarantine of the Xinguancun epidemic, which has severely affected consumption.

In its latest global forecast, the OECD noted that China’s economic growth is constrained by “weak consumer demand and the deep adjustment that is taking place in the real estate sector”.

Recently, however, China’s stock market leapt up like a scared rabbit, setting a number of new historical records: the trillion-dollar opening bell broke in 35 minutes, the fastest trillion-dollar trading turnover in history; the turnover in Shanghai and Shenzhen exceeded 2.59 trillion in a single day, a new record; and the Shenzhen Composite Index (SZCI) rose by 10.67% in a single day, with a five-day cumulative increase of 30.26%, a new record.

At the same time, the property market stimulus policies have also been introduced one after another, September 29, the Ministry of Housing and Construction meeting, said that the support of first-tier cities to use the autonomy of the real estate market regulation. Shanghai, Guangzhou, Shenzhen, three first-tier cities to follow overnight, so that the nationwide mortgage interest rates and down payment ratios have been down to the lowest level in history. The property market, the stock market, the general public on the macro-economic most direct sense of most from this. In the week before the National Day, the two markets were suddenly injected with policy bonuses that exceeded expectations.

Immediately, the whole world was asking, “What’s going on in China? In Western societies, any major economic policy is discussed for a short period of time, so that the market can prepare for it, and those who see it early will respond to it. In socialist countries like China, many of which practise a planned economy, there are traces of such policies, but the changes in China’s economy this time around have come out of nowhere, fully reflecting the government’s use of its own power of governance to make immediate changes to the economy. It can be said that such a drastic change has never happened before in China’s modern history.

However, some scholars believe that it is impossible to say for sure whether the changes in the stock market reflect a real change in the direction of the economy within a short period of time. The response of the stock market reflects the immediate decision of people’s mind, while the change of the economy is determined by whether the whole society, or even the whole world, can find a new direction from the change of policy to promote the life of the citizens. The fact that China’s stock market lagged behind other countries is mainly a reflection of China’s economic predicament. Whether the problem has been solved or not is precisely what we need to think about.

Will China’s massive economic stimulus package work?
We can look at this from a number of perspectives. It is the combined result of a series of measures taken by the government in the current complex domestic and international economic environment.

1. Monetary policy easing and liquidity support

The Central Bank of China (PBOC) has been gradually adopting monetary easing policies since the second half of 2023 to support the economic recovery and cope with the downward pressure on the global economy.

By lowering the deposit reserve ratio (RRR), commercial banks have been able to release more funds for lending and investment, increasing liquidity and making credit more readily available to businesses and individuals; and lowering the cost of financing by maintaining a lower level of the benchmark interest rate, which typically stimulates borrowing and investment.

This effectively sends a signal to the market that the government is supporting the economy, which not only boosts investor confidence, but also provides upward momentum for the capital market.

2. Fine-tuning and targeted support for the real estate market

Real estate is an important pillar industry of China’s economy, accounting for a significant portion of GDP. In recent years, the government has implemented stringent regulatory policies to prevent a real estate bubble and curb the rapid rise in housing prices, which has led to a cooling of the real estate market and even triggered capital constraints and risks in some industries.

Recently, in some non-Tier 1 cities, the government has appropriately relaxed the restrictions on home purchases and lowered the downpayment ratios, emphasizing the protection of housing demand, especially for those who just need to buy a home, which is in line with the regulatory objective of balancing supply and demand. The rebound in the real estate sector had a significant impact on the overall economy, especially on related industries such as steel, cement and building materials, which in turn boosted the market’s optimistic expectations for the economy.

3. 11th Golden Week and Consumption Drive

The 11th Golden Week is one of the most important consumer seasons of the year, covering a wide range of areas such as tourism, retail, food and beverage, and entertainment. In order to boost domestic demand, the government launched a series of policies to promote consumption before and after the holiday, such as travel incentives and holiday vouchers, which to a certain extent stimulated the activity of consumption-related industries.

4. Capital Market Reform and Attracting Foreign Investment

In recent years, the Chinese government has accelerated capital market reforms, especially in attracting foreign capital and opening up the market. The capital market reforms have not only boosted market confidence, but also provided the basis for long-term growth, driving the stock market upward.

5. External environment and global economic impact

Currently, the global economy is slowing down and central banks in many countries have adopted accommodative monetary policies, resulting in relatively abundant international capital liquidity. As China’s economy has been relatively stable and policy support is in place, some of the global capital has flowed into the Chinese market, which has driven the stock market up. Meanwhile, improved international economic cooperation (e.g. trade relations with Europe and ASEAN) also provided additional support to the Chinese economy.

Conclusion
This round of “combined fist” policies for China’s economy demonstrates a multi-faceted effort that includes monetary easing, real estate fine-tuning, and consumption promotion, as well as capital market reforms and a long-term mechanism for attracting foreign investment. Together, these measures have boosted market confidence and led to a rebound and upturn in the stock market. Despite the positive performance in the short term, the government still needs to address deep-seated challenges in the long term, including structural risks in the real estate sector and the upgrading of consumption. Future economic performance will depend on the sustainability of these policies and changes in the global economic environment.

 

What is the impact on the world?
The series of financial and fiscal policies will stabilize the real estate market in China, at least in the short term, and the real estate market actually has a very strong relationship with steel and the iron ore and coke used to make steel, so this is a transmission mechanism.

The demand for iron ore and coke exported from Australia will increase, which is the main reason why the Australian dollar has been on an uptrend against other currencies in the past two days.

In addition, China’s announced stimulus package has supported international luxury, metals and industrial companies. These industries, which are most dependent on China, are benefiting from the hope that Chinese consumption may pick up.

Will further measures be needed to stabilize economic growth in the future?
So far, this “combination” of Chinese policies has already had some initial positive effects, particularly in boosting market confidence, promoting a rebound in the stock market and supporting consumption. These measures have helped ease short-term economic pressures, especially in the run-up to the 11th Golden Week, and have succeeded in stimulating activity in some sectors, such as tourism, consumption and real estate. However, more structural adjustments and further policy support may still be needed to achieve long-term economic stability and sustainable growth.

It remains to be seen whether this short-term rebound in consumption will translate into a long-term trend, as the effects of existing policies suggest. The real estate and tourism sectors, in particular, are facing long-term structural challenges.

In order to maintain stable and sustainable economic growth in the long run, the following policy areas are likely to be the focus for the future:

  1. Further structural reforms: China’s economic growth model is under pressure to transform, and the traditional growth model of relying on real estate and investment is difficult to sustain. In the future, the government may need to promote deeper structural reforms, particularly in the areas of high-tech, manufacturing upgrading and green economy, to facilitate economic transformation and reduce the reliance on real estate and infrastructure investment.
  2. SME support and innovation promotion: SMEs play an important role in the economy, and their ability and flexibility to innovate is crucial to the sustained growth of the economy. Further lowering the financing costs of SMEs, providing tax incentives, and supporting entrepreneurship and innovation will help unleash the economy’s internal growth momentum and promote the development of emerging industries.
  3. Expanding Domestic Demand and Enhancing Consumption Power: Despite the rebound in spending during the Golden Week, in the long run, the Government needs to continue to promote income distribution reform and improvement of the social security system to enhance the consumption power of the population. By enhancing the spending power of the middle and low-income groups, the role of domestic demand in supporting the economy can be strengthened, and the reliance on exports and investment can be reduced.
  4. Mechanism for long-term healthy development of the real estate sector: Despite the short-term easing of real estate regulation to stabilize the market, how to achieve a stable and healthy development of the real estate market in the long term remains an important issue. In the future, the government may need to introduce more structural policies in the areas of supply/demand balance, land supply and rental market development, so as to avoid over-reliance on real estate as the engine of economic growth.
  5. Risk management in light of global economic fluctuations: The global economic environment is still full of uncertainties, especially with the gradual withdrawal of interest rate hikes by the Federal Reserve Board and other major central banks, the global capital flows and trade environment may change. China needs to maintain flexibility in its external economic policies, continue to promote multilateral trade and regional economic cooperation, and at the same time strengthen its risk management in foreign exchange and financial markets.

Conclusion
Overall, the existing “combined fist” policies have injected vitality into the Chinese economy in the short term, boosted confidence in the consumer and capital markets, and promoted the recovery of local industries. However, the future economic growth still faces many challenges, including the pressure of structural adjustment, uncertainties in the global economic environment and insufficient domestic demand. To ensure long-term economic stability and sustainable development, the government needs to continue to implement more targeted structural reforms and policy adjustments to ensure that the economy can maintain its dynamism and innovation-driven growth under the new normal state.

 

China’s economic stimulus has been extremely helpful to Australia, with the recent return of Chinese tourists being one of them. However, the global environment that China faces today, and in particular the tightening of the U.S., makes it uncertain whether China will be able to implement its long-term stimulus policies, despite Beijing’s very definite preference for long-term stimulus of the Chinese economy. The U.S. is also facing its own internal and external dilemmas, with its own internal economic malaise and the constraints on the U.S. in the Middle East and Israel, including the Russian-Ukrainian war, which has in fact left time for China to stimulate its own economy.

Will China’s economy recover? It will take a long time for the answer to be announced. There is no doubt about the attitude of the Chinese government, and the strategy has seen short-term results, but it is the global factors that are troubling us, and how to open up a way out of the current state of the world’s economy that is the real difficulty.

 

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Everyone needs to break out of jail

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Not long ago, Hong Kong’s renowned director Johnnie To’s interview with the foreign media about the death of Hong Kong cinema due to the restriction of creative freedom under China’s political tightening has aroused a great deal of concern and rebuttal from pro-government people. However, two weeks ago, the Hong Kong movie “Breaking Hell”, starring Wong Tze Wah and Hui Koon-man, was released in Hong Kong. Inferno, which broke the box office on its first day of release with 1,000 screenings and grossed over HK$60 million in 11 days, has been the talk of the town every day, and has been used by the official Chinese media as a reason for questioning director Johnnie To’s claims.

However, anyone who knows how to think can tell that the popularity of a movie is not directly related to the freedom of movie making. However, Breaking Hell has indeed become a phenomenon worth discussing in Hong Kong.

The film is the first of its kind in Hong Kong to focus entirely on the funeral industry. The story is set in Hong Kong in the midst of the new Crown Pneumonia epidemic, and tells the story of “Wei Dao Sheng” (Wong Tze Wah), a former wedding planner who has no choice but to join the booming funeral industry in the midst of the recession and become a funeral broker. “As he tries to apply his business acumen to his work, he clashes with his mentor, Man (Hui Koon Man), over the contradiction between tradition and innovation. In the course of their relationship and cooperation, the two explore the complex meaning of life and death together. As of Tuesday, the box office has already exceeded $60 million, and on the 16th of last week, the box office reached $9.05 million, with more than 120,000 people attending the movie, making it the highest one-day box office record for a Hong Kong movie.

A Different Story
The movie “Hell” is set in Hong Kong’s funeral industry. To put it bluntly, it takes an outsider’s point of view to lead the audience into the mysterious and traditional field, reflecting the changes in Hong Kong’s society in the aftermath of the epidemic. Originally a middle-class wedding planner, Mr. Wei Dao Sheng lost his job during the epidemic and became heavily indebted. In order to make a living, he changed his profession to become a funeral service salesman, commonly known as a “funeral parlor”. Being an “outsider”, Dawson did not understand the traditions of the local funeral industry, let alone the mentality of the customers, i.e. the bereaved families. At the beginning of his career, Daw Sang encountered many obstacles, until he befriended Man, a former master of the funeral trade, who taught him how to “put the living first”.

The movie is also a clichéd story of family reconciliation. The traditional hell-breaking ceremony is passed on to men but not to women, thus creating a rift between Man and his son, Chi-Bin, and daughter, Wen Yueh. In the end, a death ritual is performed to reconcile the deceased with the living, and the audience is able to feel relieved. The script of Breaking Hell is simple and delicate, with individual vignettes explaining how Dawson learns how to care for the living from the cases of different victims, so that the audience can understand the meaning of living together. The movie is originally of a heavy and depressing style, but the roles of Wong Tze Wah and Hui Koon-man, two actors who are generally regarded as comedians by the audience in the past, make the movie a wonderful chemical effect.

The English title of the movie is also very special – “The Last Dance”, which symbolizes the last dance for the deceased, and also provides an opportunity for the living to say goodbye officially. In the film, a freshman humanist in the funeral industry recognizes that the ceremony is sometimes for the living. At a funeral, the living are given the opportunity to say a formal goodbye. Whether it is a chance to cry or to organize and express their thoughts, emotions are taken care of, and this is an important process to help the living gradually face death and accept their loss. No matter how many grudges we had with the deceased, everything should be put aside the moment the body turns into white smoke. In the face of death, everyone can feel the pain of the heart, and it is because of this that it is especially important to say goodbye to the other person seriously.

Beyond Rituals: Breaking through the Dilemma
As an ancient civilization with a long history, China’s funeral rituals are not the same in each different historical period, after thousands of years of long sedimentation and development, formed a set of complex funeral rituals, the content of which is mainly manifested in the form of funeral and burial, such as wearing mourning, streamers to attract souls, reciting the scriptures and other forms of rituals with a strong color of feudal superstition. In the disposal of the body, the main coffin burial, earth burial is the main form of funeral in old China. After the founding of the People’s Republic of China, funeral reforms were initiated, and in February 1985, the Chinese government issued the Provisional Provisions on Funeral Management, which determined that cremation should be actively and step-by-step implemented, while traditional forms of cremation, earth burial, sky burial, and water burial have been preserved in ethnic minority areas. The “breaking of hell” in the movie is an important funeral ritual in the Taoist faith, aiming to perform the “breaking of hell” for the deceased, so that they can be released from hell and rest in peace.

The Taoist community has different views on who should perform the “Hell Breaking” ritual. Generally speaking, only those who died at a young age, died in an accident or committed suicide need to perform the “hell-breaking” rituals, but some say that people always make mistakes in their lives, so everyone needs to perform the hell-breaking rituals after their deaths in order to be freed from hell. After the director, Mr. Chan Mau-yin, had the initial concept of the script, he contacted a funeral consultant and, with the consent of the family members of the deceased, he observed the process from the mortuary to the funeral parlour and the whole ceremony for many times, which allowed him to observe various kinds of deceased in good or bad health conditions, and to understand this unfamiliar industry from the mouths of the real practitioners, which allowed him to restore the most complete scene of the funeral service in front of the audience.

The “hell-breaking” shown in the movie goes far beyond the ceremony itself, it is not a quick fix, but a continuous process. It requires courage to face the past, to talk to oneself honestly, and to look at all experiences through the lens of love. The movie shows viewers the multiple facets of life – birth and death, love and separation, pain and redemption. Behind every hell lies a path to light. As long as people are willing to face these hells, the ultimate exit will be inner peace and fulfillment. The true meaning of “Breaking Hell” is to awaken people from the predicament of life, to learn to embrace the coexistence of shadow and light, and to meet the challenges of each day with a calmer mind. When people break the hell in their hearts, spiritual redemption will follow, and life will truly be transformed.

The Renaissance of Hong Kong Cinema
The success of Breaking Hell has also injected a shot in the arm for Hong Kong’s movie industry, which has been under much skepticism in recent years. Since the 1980s, with the change of time and the influence of the external environment, Hong Kong movies, which used to be known as the “Hollywood of the Orient”, seem to have gradually lost their former glory. However, Breaking Hell proves that as long as we maintain our creative edge, write good stories, and rely on excellent local talents, Hong Kong movies can still be vibrant in the new era. The movie has not only become the opening champion of Hong Kong movies in 2024 at the box office, but more importantly, it has injected new vitality into the revival of Hong Kong movies. The reason for the movie’s success lies not only in its strong cast, but also in its profound cultural connotation and social significance.

The most profound part of the movie is that it points out that the rituals not only overcame the dead, but also overcame the living. The living are in a lot of trouble, so it is necessary to perform the rituals. This sense of ritual in traditional culture is not only a visual impact on the big screen, but also a deep reflection on the beauty of culture and the meaning of life. Through the delicate expression of these traditional rituals, the film explores the dialectical relationship between death and life, and triggers the audience to rethink their own time and culture. Director Chan Mau-yin skillfully utilizes “hell-breaking”, an intangible cultural heritage of Hong Kong, as an entry point, which not only allows the audience to feel the emotional value behind the traditional customs, but also arouses people’s concern and thinking about the funeral industry and its related culture.

“Breaking the Hell” is not only a funeral ritual in Taoism, but also an important part of the emotional bond between the living and the dead. By watching this movie, people may have a deeper understanding of life, learn to cherish the present moment and be grateful for what they have. Professor Murray, the protagonist of the popular Western novel The Last Fourteen Lessons of Tuesday, says, “Everyone knows they’re going to die, but no one wants to talk about it. The fear of death seems to be a human condition. Perhaps it is only when we let go of our obsession with life and death, our grudges against others, and our harshness towards ourselves that we truly begin the first step towards hell-breaking.

The movie is not only a spectacular cast, but also brings unprecedented visual and spiritual impact to the audience through the combination of real-life scenes and traditional culture. The brilliant performances of Wong Tze Wah and Hui Koon-man bring the movie to an emotional and philosophical level. Their different attitudes and understanding of death in the movie give the movie a strong depth of thought, making the audience think about their own attitudes towards life while enjoying the movie. Although the movie focuses on the funeral industry in Hong Kong – a work with strong regional cultural characteristics – it puts the eternal theme of life and death in the spotlight, which is common to all human beings and thus has a strong international resonance. This movie is much more than a shock to the senses, it is more of a baptism of the heart and mind.

Movies have influenced the world
Since the invention of the movie, the world’s largest film industry has been in Hollywood, followed by India with its large population. Movies were first made in Bombay, India, 130 years ago, and in China, which has a similarly large population, movies began to be made in Shanghai in 1905, with only a few Cantonese movies being made in Hong Kong at the time. However, due to China’s long history of civil wars and wars against Japan, many films were shot in Hong Kong in the 1930s, when the Shaw Brothers founded Shaw Brothers, which was the world’s largest film studio, and films were distributed to the Chinese communities in Southeast Asia. With the founding of Communist China, a large number of Chinese filmmakers came to Hong Kong, making Hong Kong the third largest film production center in the world. It is only since 30 years ago that the huge Chinese market has dominated the production of Chinese-language movies. Because of this, Cantonese movies, such as Kung Fu, Triad and Funny movies, have been influencing the development of world cinema for a long time in such a small population as Hong Kong.

However, China’s movie production has been subjected to various governmental regulations, and its themes and contents are limited, so it does not have a great influence on the world’s movie industry. As Hong Kong film productions have to develop the Chinese market, the number of films targeting the local community has decreased significantly. However, with the drastic changes in Hong Kong society in 2019, more and more local filmmakers are choosing to make films on Hong Kong society, and many of them have gained international recognition.

It remains to be seen how Hong Kong cinema will continue to develop, whether it will have the possibility of redevelopment, or whether it will gradually become a part of Chinese cinema. However, films like “Breaking Hell”, which can resonate with the majority of people in their daily lives, will probably stimulate the creation of Hong Kong films and open up new horizons, which is something that is yet to be seen.

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Trump’s Cabinet Formation Uncertainty Worsens

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On November 13, President Joe Biden and President-elect Donald Trump met at the White House to discuss the transition of power.

Biden began his remarks by calling for a smooth transition of presidential power. Afterward, Trump said that politics is difficult, but the transition will be smooth. As Trump continues to “pick and choose” his new cabinet, at least 12 key positions have been filled. Among the candidates are experienced “familiar faces,” industry elites entering politics for the first time, and “close associates” who have supported Trump for years. After four years away from the White House, Trump has been given a second chance to return thanks to the votes of millions of American voters.

Accelerating the formation of a team to return to the White House
So far, Trump has announced candidates for the positions of Secretary of State, Attorney General and Director of National Intelligence, so the new cabinet team is taking shape. Most notably, Trump has appointed a group of people born after 1980 to serve as Director of National Intelligence and Attorney General; among them, the one that has caused the most public outcry is the nominee for U.S. Secretary of Defense, Fox News Channel host Pete Hegseth, who is 44 years old and graduated from Princeton and Harvard Universities, the oldest and most prestigious universities in the U.S. He has served in the U.S. Army National Civilian Police, the U.S. Army National Guard, the U.S. Army National Guard and the U.S. Navy. He served in the U.S. Army National Guard with deployments to Afghanistan, Iraq and Guantanamo, Cuba. After retiring from the military, he joined Fox as a contributor in 2014 and quickly became a prime-time host and one of the co-hosts of the ace program Fox & Friends.

In addition to Hegseth, the new “post-80s” members of Trump’s cabinet include former New York State Representative Lee Zeldin, born in 1980, who serves as the U.S. Environmental Protection Agency Administrator; New York State Republican Representative Elise Stefanik, born in 1984, who will serve as U.S. Permanent Representative to the United Nations; Tulsi Gabbard, who will serve as Attorney General; and Florida Congressman Matt Gaetz, born in 1982. It is undeniable that Trump is already in his old age, and the nomination of the “post-80s” is probably to complete the “age transition” of the Republican Party’s power after he takes office, so that in the future he will rely more on the “post-80s” as his “political legacy”. After all, according to the U.S. Constitution, Trump will not be able to seek re-election after completing his term of office from 2025 to 2029, so he must be “far-sighted” in laying the groundwork for Vice President-elect Vance’s campaign four years later.

In addition, one of Trump’s obvious considerations in hiring is loyalty. Based on the “bitter lessons” of his last term, almost all of his nominees are loyal supporters of his own, such as Marks, who will lead the Department of Government Efficiency, and Kristi Noem, who has been nominated to be the Secretary of the Department of Homeland Security, who has been rated as a “Trump loyalist” by CNN and other U.S. media outlets. Trump’s new Department of Government Efficiency, undoubtedly a highlight, is headed by U.S. business mogul Elon Musk and Vivek Ramaswamy, who ran for the Republican presidential nomination, and operating outside of the federal government, will be tasked with a wide range of assignments. Nearly everyone agrees that the U.S. federal government, which employs more than 2 million people and spends more than $6 trillion a year, is wasteful and inefficient. Agreeing on what constitutes waste and how to eliminate it is a different matter. There is no doubt that this new department has a long way to go.
Policy Directions for the Next Four Years
During the election campaign, the Republican Party’s platform stated that it would work to “prevent a third world war, restore peace to Europe and the Middle East, and build a missile defense system that covers the entire United States”. It can be expected that the defense and military industries will continue to play an important role in the policy framework of the new U.S. government; in the next four years, U.S. military enterprises will face more opportunities, but also with the uncertainty brought by changes in the domestic political landscape. Trump himself has repeatedly stated that unless Ukraine is willing to negotiate with Russia, he will cut off military aid to the country after he takes office. He has also reiterated his first-term pledge to “rebuild and modernize the U.S. military”. Meanwhile, as Trump begins his second term in office, trust in the U.S. in the Western world, especially in Europe, is likely to decline further. Trump has repeatedly questioned whether the U.S. should remain in NATO, and has insisted that European countries need to spend more than 2% of their respective GDPs on military expenditures in order for the alliance to be worth maintaining.

Trump also repeatedly said during his campaign that he could end the Russian-Ukrainian war “in a day”. When asked how he would do that, he suggested overseeing a deal but declined to give specifics. A study written by two former Trump national security advisers in May said the U.S. should continue to supply Ukraine with weapons, but should condition its support on Kiev entering peace talks with Russia. In an interview with Ukrainian media outlet Suspilne a few days ago, Zelensky said that it is certain that with the policies of the current team in the White House, the war will end sooner. This is their approach and their commitment to the international community. Similar to the situation in Ukraine, Trump has promised to bring “peace” to the Middle East – suggesting that he will end the Israeli-Hamas war in Gaza, as well as Israel’s war with Hezbollah in Lebanon – but Trump has not specified a specific method of realizing “peace” .

With reference to his previous first term, it is not difficult to learn that Trump’s economic policies are often accompanied by aggressive trade protection measures. During the election campaign, he proposed a 20% tariff on goods from all countries, a move that was undoubtedly an attempt to make up for the fiscal gap caused by tax cuts. At a time of deepening globalization, such a policy may trigger off trade friction among countries and even lead to discord in international relations. In Trump’s mindset, trade relations should not be equal, but rather “America First”. He has imposed tariffs on steel and aluminum products from EU countries, and is now likely to face more international trade disputes during his term of office. Trump’s policy stance will have a wide-ranging impact on U.S. exports and international cooperation, and could lead to global economic instability. In the face of intense competition and possible tariff wars, other countries are bound to respond, creating new challenges for international trade relations in the future.

How Australia is handling itself
A few days ago, Australian Prime Minister Albanese was interviewed and said he had spoken to U.S. President-elect Donald Trump on the phone, saying it was a positive phone conversation and one of Trump’s first calls since his election, and that the two spoke for 10 minutes. The call covered security relations including the Australia-UK-US Trilateral Security Partnership (AUKUS) agreement. Under the AUKUS agreement, Australia will buy U.S. nuclear submarines over the next 10 years and work with the U.S. to develop new nuclear-powered submarines. Albanese said his relationship with US President-elect Donald Trump was off to a very good start. Foreign Minister Wong Ying-yin also signaled this month that the Australian government is confident in its alliance with the United States, its biggest security partner.

With Trump’s selection of China hawks for key positions in his new administration, it is expected that the US will urge Australia to do more to “stand up to China” and respond to China’s “growing assertiveness” in the Pacific. Albanese told the media that during his conversation with Trump he had suggested that it was in the US interest to have “fair trade” with its allies. He also emphasized that in the face of strategic competition between the US and China, while Australia is an ally of the US, China is also an important trading partner: it is Australia’s largest export market and a major buyer of Australian iron ore, natural gas and coal. There is no denying that the strategic rivalry between the United States and China is an issue that Australia is dealing with today. From the Prime Minister’s statement, it is easy to see that Australia wants to continue to play the role of a middle power, not taking sides but balancing between the US and China. But if Trump’s tariff threats materialize, global trade and investment will suffer, and the impact on China’s growth will spill over into Australia’s economy. The Australian economy would not be immune to an escalation of trade tensions, and the Australian government must be prepared for this.

Defense cooperation is another area where Australia and the United States have a close relationship. The U.S. is Australia’s primary security ally, with a U.S. Marine Corps stationed in the northern Australian city of Darwin, where an air base is being upgraded to accommodate the deployment of U.S. bombers. Australia is also desperate for White House assurances of continued support for the Orcus partnership. A recent poll shows that more than half of Australian respondents do not want to be involved in a Sino-U.S. conflict. Former Australian Prime Minister Paul Keating said the poll was a clear sign that people were seeing through the fog of the hyped-up “China threat” and were unwilling to get involved in a major conflict. He angrily criticized the Australian Labor government for being “completely out of touch” with the public on foreign policy, arguing that AUKUS would deepen Australia’s military bind with the US, thereby jeopardizing Australia’s own security. It is only by trumpeting himself as a peacemaker that Trump risks returning the US to a position of isolationism and exceptionalism. Fundamentally, this means that the US is neither friend nor foe to anyone. So even though the AUKUS deal has strong support from House and Senate Republicans, it will almost certainly be scrutinized by the Trump administration. There is a great deal of uncertainty about where the future will lead.

Would a change of government make a difference?
For Australians, it’s not just Trump that has changed the needs and development of AUKUS, it’s also clear that the attitudes of the two major political parties towards China will cause the ruling government to view AUKUS differently. In the last election, China clearly wanted the Labor Party to come to power because the Morrison government took a hard line against China. Now that a federal election is likely to be held in March-May next year, Albanese has shown that he has lost the support of many voters. If Liberal Mr. Dutton comes to power, what kind of attitude will he take towards China? It remains to be seen whether the Liberals will continue to adopt Morrison’s confrontational strategy, or whether they will downplay the conflict with China and keep a distance from the US. However, from the fact that both parties want to prevent China from further expanding its influence in the South Pacific Islands, it is clear that it is the common strategy of both parties to gain Trump’s support for AUKUS.

From this point of view, whether or not there is a change of government will not change the relationship between Australia and the United States significantly. However, even before Trump took office, some people in Australia proposed to replace former Prime Minister Kevin Rudd, who has long criticized Trump, to continue to serve as the U.S. ambassador. Rudd has never been satisfied with the isolationism of the United States promoted by Trump in his last term, and it is still uncertain whether Trump will become an obstacle to the relationship between Australia and the United States after he takes office. If the Liberal Party were to come to power, there is a strong possibility that Rudd could be replaced, which is something that Australians would be more interested in.

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Qantas liftgate continues to fester

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Recently, it was revealed that Prime Minister Albanese had received at least 22 tens of thousands of dollars worth of Qantas upgrades over the years.

In a recent interview on the issue, Albanese insisted he had never personally requested a Qantas upgrade, but he did not rule out the possibility that his staff had. The Australian government is under pressure to end travel by federal lawmakers and public officials on taxpayer-funded Qantas flights.

Incident still unfolding
The debate over politicians and their airfare benefits has been raging for several days now, and on Monday, Parliament resumed and federal lawmakers returned to Canberra for the session. Albanese is expected to be hounded by the Senate Estimates Committee when he is forced to defend his commitment to transparency, particularly whether his special treatment of a cabin upgrade when he became Transport Minister will affect his decision to reject Qatar Airways’ decision to add routes to and from Australia. After all, Australians benefit in terms of reduced fares if other airlines join in adding routes.

From 2009 to 2013, Albanese was frequently seen on flights in Europe and the United States, where free upgrades from economy to business class brought him significant extra value. As an example, Albanese is a familiar face on the Melbourne-Los Angeles route: his regular business class fare is about A$15,843, while economy is only A$1,458, a price difference of nearly 11 times. The Prime Minister has been criticized for his close relationship with Joyce, the airline’s former president, which may have influenced his decisions on the industry during his time as Transport Minister. However, he emphasized that last year’s call to block Qatar Airways’ request to double the number of its flights in Australia in favor of incumbent suppliers such as Qantas was made by the current Transport Minister, Catherine King. Meanwhile, Albanese said insisted he had never personally asked for a Qantas upgrade and had previously been offered tens of thousands of dollars worth of upgrades by Qantas free of charge and with no strings attached.

Despite the Prime Minister’s insistence that the record is clean, the story is still unfolding. Calls for Qantas to revoke the President’s Lounge membership continued on Monday. Independent Kate Chaney, who represents Curtin in the Western Australian federal electorate, wrote to Qantas on Monday asking for the cancellation of President’s Lounge membership. Fellow federal independent Allegra Spender, who represents the Sydney riding of Wentworth, called on all legislators to say no to the upgrades. Meanwhile, Qantas competitor Virgin has said that more than 90 percent of politicians and their staff choose Qantas flights, which are likely to be more expensive, despite rules that require them to choose cheaper flights. Virgin claims that their preference for Qantas is costing taxpayers tens of millions of extra dollars a year. This begs the question of why politicians choose Qantas. Politicians are accountable to their constituents, and if they accept any gift or form of hospitality from lobbying groups or those with vested interests, they are prone to have a stake in influencing decision-making, which in turn undermines the public’s interest, and thus affects the public’s trust in the government.

Not the Prime Minister’s personal problem
Although the incident was caused by the Prime Minister’s situation being exposed by the media, it is not his personal problem. Qantas has set up “Chairman’s Lounges” at major airports for specially invited guests of the Qantas Chairman, with a variety of high-class lounges, free meals, and business support services, and extended to become a social environment for the privileged to interact with each other, many of whom are business leaders and influential people in the community, and are free of charge to politicians. Many of them are business leaders and influential people in the community, but politicians are invited to attend for free. At present, over 90% of the 227 members of the Australian Parliament are or have been its members, and some of their spouses and children are also invited to become members.

This circle of “power” and “prestige” provides a great means of networking through the fact that everyone needs to fly and can use the Qantas “Chairman’s Lounge” while waiting. This is not the same as the Qantas Club, which is offered by the airline to frequent guests, because the invitations are provided by the airline rather than being open to everyone through set rules. Clearly, this is a private network that is not open to the public, but rather an informal network of the “powerful” and the “wealthy” that has been created by the need for air service.

The most important question is, should the Australian government allow this network? Should Australian politicians join this network?

Transparency is urgently needed
In fact, it is not uncommon for politicians to receive extra treatment. Australian parliamentary guidelines require all elected members to declare gifts worth more than $300, including gifts to family members. It has been revealed that Albanese has accepted more tickets to concerts and sporting events since becoming Prime Minister than his three predecessors combined. Because of his interest in music, Albanese has claimed tickets to ten concerts since his election in 2022. Leader of the Opposition Coalition Dutton’s social calendar is similarly jam-packed, with him receiving 21 passes for sporting events over the same period, from cricket to various National Rugby League NRL matches. Clearly, some councillors are more careful with their declarations than others, with Thornton declaring 99 hotel room upgrades between 2016 and 2019 alone, when he was leader of the opposition Labor Party.

So what about public opinion? In a recent Guardian survey of 1,131 voters, people were asked whether they should accept or reject the fact that ‘many Australian politicians get a lot of special event tickets and perks’. The majority of Australians think politicians should not accept offers or perks, disapproving of politicians attending major concerts (63% vs 23%), receiving free flight upgrades (61% vs 26%), attending major sporting events such as the Melbourne Cup and finals (59% vs 27%) and using VIP airline lounges (58% vs 28%). Around one in seven respondents (14%) were ‘unsure’ whether politicians should receive these. Labour voters were slightly more likely to support accepting gifts from politicians, with around a third (32%) supporting upgraded flights, compared to 27% of Coalition supporters. Independents and small party supporters were particularly opposed, with only 18% agreeing that politicians should upgrade flights.

Moore, chief executive of Transparency International Australia, an Australian anti-corruption organization, also said that while the disclosure of the gifts was a positive step, “there is not enough transparency”. After all, the more fundamental issue is the role of commercial organizations and the close relationship between many large corporations like Qantas and politicians. If this affects government decision-making, it becomes a bigger issue – how this intertwined relationship will affect federal politics in Australia. Openness and transparency are the guarantors of credibility, and when public trust in government plummets, the bedrock of democracy is shaken. Millions of Australians, in particular, are in a very difficult position and expect the political class to show some liberal compassion in this affordability crisis, rather than the ‘extra sting’ of politicians having privileges not available to the public.

Institutional reform is urgent
As servants of the state, politicians enjoy privileges unavailable to ordinary taxpayers, a serious departure from society’s expectations of clean government. Former judge Anthony Wheatley has said that the disclosure system in Australian politics needs to be overhauled to drive big money out of politics. The relationship between the privileged and corporations has become a major obstacle to political transparency in Australia, and the relationship between Albanese and Qantas is a typical case: on the surface, it is a personal privilege storm, but in fact, it reveals a deep-seated transparency crisis in Australian politics. In an era of highly publicized information, it is difficult for any abuse of power to escape public scrutiny. In the face of increasingly stringent public scrutiny, the government needs to realize that the public expects not only verbal promises, but also practical behavioral changes, and furthermore, a profound interrogation and reform of the fairness and transparency of the entire political system, in order to avoid the recurrence of similar situations.

For 3,000 years in China, the emperor has held all the power, and the bureaucracy has governed the society through layers and layers of power distribution. Power corrupts, and this has led to the formation of an extremely powerful system of corruption, and even more frighteningly, corruption has become the culture of the entire society. From the emperor to the common people, everyone accepts that corruption is perfectly acceptable as long as it is not excessive. I still remember the establishment of the Independent Commission Against Corruption (ICAC) in Hong Kong in 1974. Apart from investigating corruption cases and bringing the offenders to justice, the ICAC did more than anything else to promote integrity education to adults in the community and students in schools. Of course, many people have criticized the ICAC for not allowing family members of patients to give small red packets to health care workers to thank them for taking good care of their family members, which is considered unsympathetic. It is only after decades of social education that a clean social standard has been established.

If we look at Asian societies, we can see that the collusion between business and the government and the protection of the government in China, and the small state and big plutocrats in Korea, all these have provided negative examples for the Australian political scene. In Korea, for example, the plutocrats have undeniably contributed to the miracle of compressed growth in the Korean economy, and they have risen to prominence through political largesse. As these zaibatsu grew stronger and stronger, they in turn became hostage to politics. Politicians relied on the political and economic resources of the zaibatsu to run for elections, and also relied on the economic growth of the zaibatsu to create political results, and the mutual transfer of benefits and support between politicians and zaibatsu has become the backstage mode of operation of Korea’s constitutional government. As the major plutocrats have been linked to various corruption scandals time and again, the public discontent and controversy caused by the plutocrats’ domination of the country has become more and more intense. On the contrary, Singapore, where “high pay keeps corruption low”, has set a model. After all, the system is more reliable than the people, only through the combination of the system and the leaders, it is possible to fundamentally realize the rule of law and clean government. The authority of Singapore’s “Father of the Nation”, Lee Kuan Yew, was not only to rule the country strictly, but also to rule the government strictly, and even more so to rule the party strictly, and it was an authority based on a set of modern legal system. It is precisely because of this set of institutions that the high pay for honesty and integrity can be effective, and it is only because of this that it can gain the basic recognition of the common people.

The Prime Minister must set an example
Against the backdrop of soaring living costs and increasing economic pressures, Australian voters are desperate for a leader who truly understands their plight, rather than a political elite living in a privileged bubble. In order to rebuild voters’ trust, it is not only necessary for Albanese to give a more transparent explanation of the incident, but also for the political scene as a whole to conduct in-depth reflection and reform. The public expects a more transparent and fairer political environment, where every government decision can stand the test of public scrutiny.

In this regard, Albanese, as the prime minister, has to practise what he preaches, not only by saying that he is clean, but also by letting the society see that he is clean, and by setting a higher standard. The famous phrase “power corrupts” not only indicates that those in power have a tendency to corrupt themselves, but also that those in power are tempted to use their power for their own personal or corporate interests. Therefore, politicians and civil servants at all levels need to be held to a stronger standard of integrity.

When the government provides funding to organizations, it will emphasize that the applicant must not have any conflict of interest, and if possible, must declare it, and it can affect the success of the funding application. Why is it that a Member of this Council is so vocal in insisting that as long as a declaration is made and registered, he can legitimately accept gifts from large corporations? This is clearly a double standard and shows the hypocrisy of the legislators.

It is time for Prime Minister Albanese to make major reforms and educate legislators.

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