16 November 2014

Gentlefolk,

This post starts with APEC, but then memories of Bob Hawke kicked in, and the Embassy's involvement in bringing the Channar Joint Venture to fruition ... a walk down memory lane ... good old days ...

APEC

Local media has been full of stories related to the APEC meetings held in Beijing last week.  All very positive of course.  But hard to know what to make of it all.  If you peel away the platitudes and buzzwords (FTAAP; regional connectivity; Asia Pacific dream; etc, etc) real achievements are hard to find.

Apart from being a wonderful make-work boon for hundreds of public servants, the substantive outcomes seem to be from meetings "on the sidelines" where bilateral issues are discussed by Leaders and Ministers (such as the excruciatingly drawn-out Sino-Australia Free Trade negotiations).

Who could have come up with such an idea and such an awkward name - Asia Pacific Economic Cooperation?  What: meeting, summit, conference, wank?

Well, it all started with Bob Hawke, when he was Prime Minister of Australia.  In 1989 he had a vision of greater cooperation on economic issues by Pacific Rim countries.  Australia's then Minister for Foreign Affairs and Trade, Gareth Evans, hosted the inaugural meeting of APEC in Canberra in November 1989, which was attended by representatives from 12 countries (membership has since increased to 21 countries, with a permanent APEC Secretariat based in Singapore).

The USA was the APEC host country in 1993.  President Bill Clinton expanded the invitation to country leaders (as well as the usual economic and trade ministers) and the annual Leaders Meetings have been the key focus ever since.

APEC Ministers and Leaders meetings were held in Beijing 5 - 12 November 2014.

It has become a tradition that APEC leaders wear a 'local' shirt or coat.  The much-anticipated confrontation between Abbott and Putin was a fizzer.

Bob Hawke

Bob Hawke, now a sprightly 84, attended APEC in Beijing.  This was reported to be his 100th visit to China (his first was in 1978).  Remarkable - hope that I am as fit and active at his age!

In his keynote speech at the China Day High Level Summit on 7 November 2014 he said "As China's wealth and power have grown, its expectations and aspirations for a bigger regional role have grown too.  We must accept that any sustainable new order in Asia must accord China a substantially greater position than it has exercised hitherto." He acknowledged the role of the USA in maintaining regional stability, but said that it would have to adjust its approach to accommodate the rise of China.

Bob Hawke in Beijing for APEC, November 2014.

Bob Hawke's presence in China brought back memories of his visits to Beijing when I was at the Australian Embassy there.

Australian Embassy, Beijing 1983 - 86

I was Counselor Commercial (Trade Commissioner) in the Australian Embassy, Beijing, from December 1983 to December 1986. The head of the Trade Section (Minister Commercial) was Jocelyn Chey, a fluent Mandarin speaker and a wonderful boss. Colleagues included Roger James, Michael Tjoeng, Bing Chen, and Jonathan Scott.

Back in the Department of Trade in Canberra, our main contacts on China were Deputy Secretary Paul Barratt and Assistant Secretary Denis Gastin.  They were a bright, energetic team, full of ideas including a strategic vision of what an emerging China could mean for Australia in terms of trade and investment.

Dennis Argyle was the Ambassador when I arrived; in 1985 he was replaced by Ross Garnaut.

My contacts in the Political Section of the Embassy included, at various times, David Ambrose, Colin Heseltine, Richard Rigby, Kevin Rudd, and Geoff Raby.

After a hiatus of 30 years, China was opening up to the world which meant a myriad of new trade opportunities.  Labor was in government and Ministers lined up to visit this ancient yet mysterious land. It was an exciting, hectic time.  Everyone in the Embassy worked hard - there was a tremendous sense of cameraderie and involvement - I had 3 or 4 days off in the first three months, such was the pressure of work.

The mining industry was part of my responsibility in the Trade Section.  Australian companies were interested in selling mining equipment and services to China, particularly to the enormous, but antiquated, coal industry.

But the big bucks for Australia would be in supplying a range of ferrous and non-ferrous minerals to feed China's growing industries.  If we could only persuade China to invest in our mines, wouldn't that guarantee us a market?

It seemed a very long shot - to get hard-bitten, committed marxists to invest in a foreign private venture.  Today Chinese government companies invest billions of dollars overseas every year, but 30 years ago it was a revolutionary idea, a fanciful notion.

To cut a long story short, an all-of-government effort was launched to 'sell' the Channar iron ore deposit in Western Australia as a joint venture opportunity between CRA (now Rio Tinto) and the Chinese.  As the Embassy's 'point man' on this project I attended countless meetings in smoke-filled rooms, countless banquets - consumed mountains of sea cucumber & rivers of moutai - all in the service of my country! The reports which I sent back to Canberra must have totaled a million words (all hand written in those days).

By the time my posting ended in December 1986 the erstwhile 'absurd notion' had gained traction. Finally, in November 1987 the Channar Joint Venture was signed, sealed and delivered.  Eureka!

Channar was the first major overseas investment by the Chinese government, and served as a model for the many thousands which followed in future years.

Beijing 30 years ago

Today Beijing is one of the world's great cities, but it was not always so.

Beijing was a very different place 30 years ago.  While the dramatic changes arising from Deng Xiao Ping's 1978 'reform & opening' were taking hold in the southern provinces of China, change came more slowly to northern China, especially Beijing which was the centre of government.  The locals had suffered through many years of fluctuating government policies, and they kept their heads down and adopted a wait and see attitude.

Here are some examples of what life was like in Beijing 30 years ago.

Beijing was a city of 8 or 9 million at that time (it has more than doubled since) but it only had about 100 restaurants.  Can you imagine that?  During the long years of the Cultural Revolution the locals stopped eating out.  Publicly indulging oneself was dangerous - could be criticised - so everyone kept a very low profile.  The restaurants which existed catered for foreign delegations and visitors.

Now there are many thousands of good restaurants and shops in Beijing.

Almost everyone traveled by bus or bicycle at that time.  The few cars which existed belonged to 'danwei' (organisations). I recall the excitment when the first private individual bought a car in 1984 - it was front page news.

Now there are over 100 million privately-owned cars in China.

It took 6 weeks for a phone to be installed in our apartment in Beijing.  In those days private phones were rare - people had to use office phones or public phone boxes on the street.

Now there are over 1 billion mobile phones in China; almost half are 'smart phones'.

There was virtually no entertainment. We had to make our own fun.  The foreign community was very small - the fledgling International School of Beijing which our young children attended had less than 100 students - but the shared hardships brought the expats together.

We are still in contact with many friends we met at that time, such as Embassy staff Art Kobler & Mai (USA), Willi Meier & Gihane (Switzerland), Wilfried Losem & Maria (Germany). Roger Banville & Isabel (Canada); and company people such as Kaare & Alice Ronsberg, George & Cola Fowler, and Kerry Jelbart.

By 1985 Beijing was fully in change-mode.  Small restaurants and shops were opening, new hotels too, citizens started wearing more colorful clothes. When we left at the end of 1986 we marvelled at the sight of about 50 tower cranes which we could see from our balcony at Jiang Guo Men Wai.  Little did we know that was just the start of a sustained boom which would change this city and country forever.

Here are some pictures related to the Channar project.

Hamersley's Channar iron ore deposit in Western Australia, located between Tom Price and Newman.  Hamersley was a subsidiary of CRA which later became Rio Tinto.  In 1983 Ian Bauert established the CRA representative office in Beijing.

Bob Hawke showed Hu Yao Bang the Channar deposit in 1985.  Hu was the head of the Communist Party and it was vital to get his support for the proposed joint venture.  A young, bearded, Ross Garnaut, then Australian Ambassador to China, accompanied Hu Yao Bang around Australia.  

In 1986 Bob Hawke met supreme leader Deng Xiao Ping in Beijing, which was a very positive sign for bilateral relations.  From the Embassy, bearded duo Ross Garnaut (left) and Richard Rigby (right) were in attendance.  

November 1987 Bob Hawke witnessed the signing ceremony of the $420 million Channar Joint Venture between Hamersley  (60%) and China Metallurgical Import Export Corporation (now Sinosteel, 40%).  It was China's very first overseas investment by a State Owned Enterprise and the culmination of years of effort by Rio Tinto and the Embassy.  A huge leap of faith by China's leadership at that time, and fortunately one which turned out to be 'win-win' for both sides.

Bob Hawke on the hustings during the 1987 general election; a formidable opponent in his prime.   He was Prime Minister from 1983 to 1991, Australia's longest serving Labor PM.

Bob Hawke loved sport, especially cricket, and still enjoys a round of golf.  I was assigned to play tennis with him when he visited Beijing in 1984.  He only had an hour to spare in his busy schedule, so we played one extended set which he won 10 games to 8.

Where are these actors now, who had leading roles in the "Dreaming of Channar" play so long ago?

Well, we know the whereabouts of Bob Hawke - he has just been in Beijing - and is still very much involved with China.

Paul Barratt had a distinguished career which included a spell running the Department of Defence. Among many interests, he is the Chairman of the Board of Australia 21 (www.australia21.org.au). He often appears on TV and radio as an expert commentator on a range of social and defence issues. A thinker, a man of integrity, still contributing.

Kevin Rudd went into politics, and was the 26th and 28th Prime Minister of Australia.   I know many of you won't agree, but I regret that he didn't have longer in The Lodge.  He fell foul of the powerful mining lobby over the introduction of a "Super Profits Tax" and they crucified him in the media; finally his own Party dumped him.  He certainly had his faults (don't we all?) but he is a man of rare intellect and vision.  He is now at Harvard University, working on China-related issues.

What about others, such as Ross Garnaut, Richard Rigby, Denis Gastin and Jocelyn Chey?

Ross Garnaut is considered one of Australia's preeminent economists. Although best known for his recent work on climate change, he is also an expert on China.  His output is prolific: he has authored or co-authored 47 books (including 2013 "China: new engine of world growth" and "Dog days: Australia after the boom") and many articles.   He predicted the end of the "China Boom" and said that Australia would only get through the following hard times by having "a radically lower exchange rate".  He doesn't mince words.  When asked last week where the US-China announcement on the environment left Australia, he replied "Still up shit creek!" 

On 2 September 2014 Vera & I caught up with Richard and Tai Fang Rigby in Canberra.  Richard attained Ambassadorial rank before leaving DFAT to become the inaugural Director of  the impressive China Centre at the Australian National University.  In August I attended an interesting lecture there on the great Chinese admiral  Zheng He.

Denis Gastin drove the China Action Plan from the Canberra end - a man of  vigor and vision. When he left the public service, Denis turned his passion for wine into a viable business.  He is a respected wine writer and commentator,  His special interest is new wine making regions; he has toured wine regions in China.   

Jocelyn Chey completed her diplomatic career as Australia's Consul General in Hong Kong.  She then returned to academia and is now  Visiting Professor at the University of Sydney.  Her latest book is titled "Humor in Chinese life" (2013).  She was an inspired choice to head up the Trade Section in the Beijing Embassy during the mid-1980s.  She understands China and the Chinese - I have never seen anyone who could make them feel so at ease, so quickly. 

...

Well, that's it for this post.

It certainly didn't turn out as planned ... but once I started thinking about Mr Hawke and his visits to Beijing, memories came flooding back.

Achieving the Channar joint venture was the #1 priority of most of my posting in Beijing.  Looking back now, after almost 30 years, I am still surprised that it came together.  It took a combined effort over four years from the Embassy, Canberra, the WA government, and CRA.  Still, I marvel that the Chinese officials took the plunge.  At the end of the day, Chinese are pragmatists and the ultimate value of the deal was obvious.  We had something they needed, they had things we needed (capital, and a market) and we were able to give them the confidence to join together.

Isn't it interesting that many of the participants in this little drama 30 years ago are still actively involved with China today? China, seductress!

Best wishes, and keep smiling.

Alex & Vera Olah
English teachers at the China University of Petroleum, Qingdao
www.upc.edu.cn
Sunday 16 November 2014