A fascinating column by Paul Kelly this morning and how often can you say that? It is about how the Chinese are trying to set up an international system of masters and serfs with the Chinese leading the way. Its title is a bit inscrutable but the advice to be cautious is dead on: One Belt, One Road: Australia needs to bide its time. In essence, the Chinese are seeking to lead an international movement in which government spending and direction are at the centre. Private sector activity may then follows at the periphery but the government takes the lead. Malcolm is a sucker for just such a vision, a vision he continues to advance domestically to our immense cost. Here is the essence of the plan:

Ten days ago 29 national leaders and delegates from 110 nations including Australia came to Beijing in response to a “summons” — an invitation, of course — to honour a Chinese dream and become participants in Xi’s vision to re-create the ancient Silk Road and jointly build the Silk Road Economic Belt and the 21st-century Maritime Silk Road.

It is an idea so big and sprawling that it is hard to grasp, a sign of weakness as well as ambition. It extends into Asia, Africa, Europe and the Pacific.

It is the next stage in China’s projection as a global and regional power and constitutes a fusion of two of China’s immense skills, infrastructure construction and financial backing. . . .

Building influence through infrastructure and financial power is the essence of Xi’s strategy, and hyperbole about Belt and Road seems limitless. . . . But the extent to which China’s balance sheet can be leveraged for infrastructure projects in other countries, often of dubious financial viability, remains unknown.

Malcolm is, of course, a past master at leveraging infrastructure projects of dubious financial viability. Bad ideas are his forte. Stay tuned.

To which we may now add: China credit rating downgraded by Moody’s which begins:

China’s credit rating has been cut one notch by Moody’s due to the rising debt needed to keep the economy growing.

Non-productive spending will do it every time. If you don’t produce what can then be sold eventually you cannot repay your debts.