A Fed Red Is Safer?

Since Australia was settled 180 years ago, the mainstay of its economy has always been British purchases of Australian wheat and wool. Now, with Britain dickering for membership in the Common Market and the whole system of Commonwealth tariff preferences threatened with extinction, Australia is looking around anxiously for other agricultural customers. And its eye has lit on Red China, whose own monumental crop failures have forced it to buy grain abroad. During the past two years, with the purchase of $180 million worth of Australian wheat, barley, oats and flour, Red China has become Australia's fourth biggest export market (after Great Britain, Japan and the U.S.).

This year Australia has a bumper wheat crop estimated at 300 million bu. ready for harvesting, and is eager to sell more to Peking. The Hong Kong business community is full of reports that the Australians will offer more liberal credit terms to the Chinese Reds in the hope of undercutting the Canadians, who last year sold $120 million worth of grain to Peking.

So far, Peking has paid for its grain in sterling, and Australia has bought relatively few Chinese products in return. B. F. Hsu, chief of the Red Chinese trade mission currently in Australia, wants to change all that. "We have helped Australia a lot by taking your grain," says Hsu. "Now we want you to import our textiles, minerals and toys."

Hsu may yet get his way. Though Prime Minister Robert Gordon Menzies' government refuses diplomatic recognition to Red China, it discreetly shuts its eyes to whatever deals are worked out by Australia's quasi-official commodity boards. In Melbourne last week, delegates to a farmers' and ranchers' convention resoundingly voted down a resolution condemning trade with Peking. Cried one delegate: "A fed Red is less dangerous to the free world than a starved one."

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