China is directing this at the Australian business community, not its defense establishment. One should be reminded of the behavior of Rupert Murdoch's NY Post during the 'spyplane' incident. While the NY Snooze, the other major tabloid led with the story every day for three days, the Post buried it. The Snooze's editorial and Op-Ed pages were filled with articles duly condemnatory of the PRC. The Post waited 3 days, published a defense of the Chinese by one of their embassy honchos and then had a lengthy article by the highly-paid PRC apologist, Henry Kissinger. The reason for the Post's uncharacteristic reserve in attacking those who attack Americans was quite simple. Murdoch was closing a big deal with the PRC.

Just as the Soviets discovered during the Cold War until Reagan got into office, the PRC leadership understands that the business community will 'sell us the rope by which we hang them.' American and European banks happily financed much of the Brezhnev expansion in exchange for a few shekels. American farmers, a class for the most part as swinish as the hogs they raise, happily sold grain to the Soviets at prices lower than Americans paid. Australia's business community has the same relation with the PRC.

By threatening the business relation between Australia and the PRC, the Politburo is hoping to utilize internal pressure on Howard to split off Australia from the US. Were Keating the PM, this would probably work as he was up to his earlobes in PRC money, but I don't think Howard is as venal.

Bart, good point. The interesting thing is, China has no real friends. Everyone says that America has no friends. Yet, even during this current massive upsurge of global anti-Americanism, the United States can count on certain nations. But China has no real friends. It buys them, or it rents them. Or it bullies them by threatening them with the loss of Chinese business. That's the inevitable achievement of dictators who can only think of human relations in terms of repression, coercion, or bribery.

Bart, also Murdoch's Directv, while it charges extra for most other foreign programming -- Japanese etc -- allows all its subscribers to see the English language Red Chinese "news" channel. Part of a Murdochian quid-pro-quo.

Disgusting.

China is warning a lot of people lately and rattling its sabers. Interesting, wonder what they are really up to?

I wonder if they think they can attack Taiwan on George Bush's watch and survive. A bad, bad assumption on their part, I think. The George Bush of the spy plane incident is long gone.

Bart: They must hope the Aussies have lost the power of rational thought. China's main customer is the US. If they are in a shooting match with the US, trade will halt and the Chinese dollar reserves will be frozen. They won't be buying anything from Austrailia anyway.

Here is the mantra. China is not going to attack any US ally. First, they do not want to loose the $6*10^11 in T-bonds. Second, they cannot afford to loose the precious only sons of the people who have followed the one child policy. They will bluster for domestic consumption mostly, but they will not act.

Robert,

Agreed. I've made a similar point frequently. The one thing is though, given the fact that the leaders in the PRC seem to have tremendous leeway to act individually without direction from the top, what is the likelihood that one of them might cause a war that will necessarily cause the others to support him, even if they know it's in their best interest not to?

"Second, they cannot afford to loose the precious only sons of the people who have followed the one child policy."

Brilliant observation, Robert!

The danger lies in miscalculation by China's rulers. If they ever come to believe that Taiwan is ripe for an easy takeover, they could start a war without really intending to fight one.

History is filled with examples of human error and misunderstanding leading to war. Remember how tens of millions of Europeans greeted the outbreak of the First World War. In August of 1914, almost no one thought the coming war would be so long and bloody. When Hitler invaded Poland in 1939, given how France and Britain had caved in to him at Munich, he was flabbergasted that they actually honored their commitments to help Poland. In America's own civil war, the leaders and publics of both North and South originally thought the war would be short.

It's very easy to come up with a reasonable scenario of how war might break out between China and Taiwan: Let's say it's ten years from now. As China's economic bubble bursts, recession begins to grip the country. China's dictators are panicking. They can't rely on legitimacy from Marxism-Leninism-Mao Zedong Thought because no one believes the garbage anymore. They can't say that China is becoming ever more prosperous. Social unrest is spreading from the countryside to the cities. Just at this time, America's and Japan's leaders, preoccupied with their own domestic issues, seem to be cooling in their commitments to defend Taiwan. Taiwan's politicians have neglected the island's defenses, because they've been spending money on social and environmental projects to win votes rather than on the military. At the same time, China's aggressive diplomacy has reduced the number of countries that recognize Taiwan as a legitimate nation-state to less than ten. Taiwan is more isolated internationally than it has ever been. China's rulers begin to think that now would be a good time to recover the island and pose as the champions of Chinese nationalism. They convince themselves they would have the support of hundreds of thousands of Taiwanese businessmen whose personal fortunes are now linked with China's economy. The PLA has new submarines and a new blue-water navy, painfully built up over the years, that can impose a total naval blockade over Taiwan. PLA hackers can disrupt electronic communication all over the renegade island. China's generals calculate that their missiles can take out Taiwan's entire air force, with the help of intelligence provided by Chinese spies who have infilitrated the island by the thousands as illegal immigrants. A blockade and a swift blow now, China's rulers tell themselves, will surely bring the Taiwanese to their senses, make an amphibious invasion unnecessary, and bring a cheap victory to shore up the regime. So the Chinese attack, but the initial strikes aren't as successful as expected, and surprise! the Taiwanese refuse to surrender and fight back ferociously. After some initial hesitation, America and Japan decide to support Taiwan and mobilize their navies to break China's blockade. Full-scale war has now broken out. Where it will all end, nobody knows.