ON-BUILDE Even in the Gobi, the Party party goes on

Last Updated:2021-09-02

Infrastructure investments by funds may be legal, but spending millions of dollars on TV ad campaigns promoting that invest ment should not be, he says.

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The All in This Together campaign is a ‘‘political ad’’, the senator asserts, evidenced partly by the fact that a former politician in Combet stars in them.

For their part, industry funds and their lobbyists have successfully argued in the past that marketing and advertising is in the fifinancial interests of members by luring them away from poor-performing rivals. The argument was accepted by the Hayne royal commission into misconduct in fifinan cial services.

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Treasury sources previously told the Fin ancial Review they expect media advertising by funds to be thwarted by the Morrison Government’s Your Future Your Super reforms, which were rubber-stamped by Parliament last month and tightened the sole purpose test. But whether super industry market is actually curbed is a question now for the Australian Prudential Regulation Authority in how it reads the clarifified defifinition of ‘‘best fifinancial interests’’. The ability for funds to buy into infra structure at all was almost disrupted by the reforms, which originally included an annual performance test based on bench marks that many experts believed would punish funds for invested in unlisted assets and incentivise them to simply track a sharemarket index. At the 11h hour, the performance test was amended to add infrastructure- and property-specifific benchmarks, following a backlash by Nationals MP nervous that the rivers of gold from super funds to regional projects would dry up. Weaven describes the government’s reforms as ‘‘nonsense’’ and says he is not surprised that some within the govern ment’s ranks are eager to curb the rising power of the industry funds. ‘‘If they believe that in some way the industry fund movement benefifits unions in any way they see that as bad for them and good for the Labor Party,’’ he says.

Though they were formed out of the ACTU’s push for compulsory super in the late 1980s, and still maintain union repre sentation at board level, Weaven claims the links between industry funds and the labour movement are ‘‘exaggerated’’. Opposition stems therefore not so much from ‘‘rational fear’’ as from a cultural phe nomenon he describes plainly as snobbery. ‘‘It’s all about the old school ties and good old days when the Collins Street and Pitt

Street brokers ran the world andwent down the Australia Club for lunch,’’ the culture warrior says colourfully. ‘‘They still do, unless they’re women.’’ But despite the class warfare argument still being made by Weaven and his old ally and former prime minister Paul Keating, credited as the architect of the compulsory super system, the traditional titans of capital markets are no industry fund critics. Far from it. Goldman Sachs, arguably the world’s
most prestigious bank, is advising IFM and the so-called Sydney Aviation Alliance on their historic airport bid. Fellow Wall Street behemoth Morgan Stanley, meanwhile, has tasked one of its hot-shot local investment bankers, Nancy
Tchou, with overseeing superannuation accounts specififically since the onset of thepandemic.
Tchou, an executive director in Morgan Stanley Australia’s infrastructure M&A team, says big super funds are becoming seriously valuable clients for investment banks. ‘‘Our Australian compulsory superannu ation contributions means that the pool of money going into these funds is signifificant and growing every year,’’ she says. ‘‘This means that funds are looking to deploy capital and, given the scarcity o favailable traditional infrastructure assets, are increasingly considering assets beyond what is defifined as traditional infrastruc ture.’’ Consolidation such as the $200 billion QSuper-Sunsuper merger and formation of Aware Super from the NSW, Victorian and West Australian public service worker funds are creating mega-funds which can write increasingly sizeable cheques for pre viously out-of-reach assets.But a senior investment banker, who asked not to be named, agreed industry funds are now very good clients. After all, To escape the self-congratulatory, fervent and, indeed, reverent adulation over the Communist Party of China’s centennial celebrations, it seemed timely to go a long way fromBeijing.Wewent far outwest to

DunHuang, a town in the Gobi Desert, some 312hours by air. DunHuang holds some of theworld’s great artistic treasures. Its ancient networks of grottoes are still richly adornedwith Buddhist frescoes and statuary. From the fourth century, itwas a garrison town and staging post for the great caravans along the Silk Road. Outside the town, in the brutal, inhospitable Gobi Desert, the Silk Road bifurcated into its northern and southern arms. Beyond the administrative complex of Yu Men Guan (Jade Gate Pass)was the deadly Taklamakan Desert,which the two arms of the Silk Road skirted, and beyond that, the barbarian lands of thewest. At the staging post of DunHuang, a tradition grew bywhichwealthymerchant traders decorated caves carved into cliffs high above a river valley.They believed that to do sowould bring protection from the evil forces beyond. And those that returned decorated the caves to say thanks for having survived and returned to civilisation. For a thousand years, DunHuangwas, for the Chinese, the outer edge of civilisation. A section of thewesternHan Dynasty (206BC– 220AD) ‘‘GreatWall’’ built in about 120BCcan still be seen, togetherwith the ruins of massive granaries, armouries and beacon watch towers from the same era.The fortififications and defences provided security butwere at times overrun by maraudingHun tribes, Tibetan armies and
Islamicwarriors. Thiswasmy third visit to DunHuang in 13 years.Three distinct sites can be visited, themostwell known are theThousand Buddha Caves, orMo Gao Grottoes. On previous visits, the siteswould be clogged with tourist buses disgorging Japanese and Koreans seeking the Buddhist origins of their faith, and US and European visitors. Today, visitors aremainly Chinesewith only a smattering of foreignerswho live in China’s eastern seaboard cities. In the nine years sincemy last visit, Chinese domestic tourism has surged, as has interest in Buddhism, and Dun Huang is amust-see destination for believers. Itwas the start of the school holiday period and familieswere travelling in numbers.
Much has changed sincemy last visit. There are new reception centres, high qualitymuseums, and amenities. Access to themany grottoes is strictly controlled. Numbers permitted to enter are limited to ensure humidity in the caves, in thismost arid of places, does not rise to levels that can damage the beautiful, ancient frescoes. In the hot summer evenings, Dun Huang’s busy nightmarkets continue to thrive.Beijing’smany restaurants from the western areas of China have had to shut down their outside barbecues as part of the continuing efforts to clean up the city, imposing a dull uniformity.But, in Dun Huang, delicious hot, spicy lamb is still roasted outside on skewers and people sit in the lanes eating and drinking beer. Modernity has alsomade its presence felt in this ancient Silk Road town. Some 25 kilometres out of the city to thewest, and visible from the rooftop cocktail bar of the Silk RoadHotel, is theworld’s largest ‘‘super mirror power plant’’, or SunTower. Commissioned in 2018, it is designed to produce 390million kilowatts of power annually and save 350,000metric tonnes of carbon a year. The power lines connecting

A local choir practises for the Communist party celebrations in Dun Huang. PHOTO: GEOFF RABY

Even tiny, parched, sand-blasted hamlets in the Gobi Desert had the same signs, slogans and events to celebrate the big occasion.
to the grid in China’s east sweep across the desert into the horizon in undulating, long ribbons ofwire. In the desert’s vastness, against the electric blue sky, it glows supernaturally like some alien presencereminiscent of the gleamingmonolith in Stanley Kubrick’s 1968 fifilm,2001: A Space Odyssey. From the late 19th century until the First WorldWar, explorers of the old Silk Road fromBritain, France, Germany, the US, and Japan raided artefacts long buried under the shifting sands of theTaklamakan Desert, carting off vast quantities of rare and precious frescoes, statues andmanuscripts for their museums.

Geoff Raby, above,enjoys cocktail hour at the Silk Road Hotel’s rooftop bar; below, the reclining Buddha gold statue at the Mo Gao Grottoes, which once attracted busloads of foreign visitors. PHOTO: GEOFF RABY

It is awound deeply felt in China. Curiously, in a time of heightened Chinese nationalism, the fifinemuseum in Dun Huang simply notes the fact that the manuscripts of Dun Huangwere taken by Stein. Our tour guidesweremuch less restrained in their commentary. Even in this remote corner of China,with its frontier history and far from the buttoned-down, assiduously choreographed celebrations of the Communist Party’s centennial inBeijing, the eventwas of course also beingmarked. The day before the big event, in a corner of the open-airmarket, a choirwas practising singing tributes to the Party. Behind them, large televisionswere continuously showing patriotic fifilms of Chinese resistance to Japanese occupiers. The late afternoonwas hot and dry and plenty of long-neck beer bottleswere open on the table at hand. Even tiny, parched, sand-blasted hamlets in the Gobi Desert had the same standardised signs and slogans, posters, and community events to celebrate the big occasion.The Party is everywhere. Still, if one is to be stuck somewhere in the COVID-19-constrainedworld inwhichwe now live, China is a pretty good option.The country is hugewith a lifetime of rich, compelling travel experiences.

In China, as in Australia, facemasks are mandatory on planes and in airports, as well as in shoppingmalls. It is also necessary to show a green QR code before entering an airport andwhen checking in for a flflight or hotel room.The QR code also identififies if you have been vaccinated. The government claims to have vaccinatedmore than 1 billion of its citizens. The process is effificiently run. I’ve hadmine with one of the three local vaccines. As for their effificacy, it is something detailed studieswill have to determine in time. Anecdotally, inmy case, I had no side effects and despite the nurse’s stern recommendation not to drink alcohol for 24 hours, I had somewinewith lunch immediately afterwardswith no adverse reactions.

Nonetheless, things aren’t quitewhat they were before COVID-19. The airports and railway stations are nowhere near as crowded andjostling as theywere 18 months ago.The planes and trains seem full, but clearly, signifificantly fewer people are travelling. And China remains closed to foreign tourists.