Frank Zappa’s observation that “Communism doesn’t work because people like to own stuff” might seem like a flippant remark, but it reflected a brutal truth. Deng Xiaoping’s market reforms in the 1980s tacitly acknowledged this truth: not even the Maoist regime could stop basic human entrepreneurship. Black markets flourished under communism, no matter what Marxist theory might say.
But where do you draw the line between entrepreneurship, black market defiance of authoritarianism, and out-and-out profiteering? Where does The Shawshank Redemption’s Red Redding become King Rat’s Corporal King?
In the 1980s, Olivia Newton-John founded the Koala Blue business by importing Australian products like Vegemite and Violet Crumbles to sell to homesick expats and curious locals in LA. In a similar vein, Chinese students in Australia hit upon a lucrative business: taking orders for Australian-made products and mailing them to folk back home.
One of more than half a million international students studying in Australia[…]pays her university fees, rent and living costs by buying Australian-made products and posting them to China.
[…]Angela is one of an estimated 150,000 “daigou” — Chinese for ‘buy on behalf of’ — working here in Australia.
The daigou business model is completely understandable in many ways.
In 2008 tens of thousands of Chinese infants were hospitalised, and dozens killed, by tainted locally-made milk formula. The scandal – which was abetted by official incompetence and cover-ups – sparked a crisis in confidence among Chinese consumers in locally-made products. Enter the entrepreneurs.
The daigou model has become a massive industry, “a multi-billion-dollar economic backchannel integrating retail, marketing, and logistics services across the country”. As many as half a million packages are sent to China every week.
But as daigou industry has grown, it has also raised questions about the business’s dark side.
The crisis sparked a phenomenon here of personal shoppers in Australia sending products to China, which has often made headlines over the years with Australian parents furious about baby formula shortages and the daigou’s ability to influence share prices by having a preferred brand.
[…]while the daigou phenomenon continues to grow, a number of unanswered questions remain: such as whether these lucrative backchannels are creating tax loopholes, or whether it’s responsible for companies to rely on a marketing strategy that they can’t control.
From baby formula to Tasmania’s Bobby the Bridestowe Lavender Heat Pack Bear, buying limits have been imposed on some Australian products to try and stop daigou buying up entire stock. When a Chinese warship docked in Sydney last year, photos of crew members lugging hundreds of tins of baby formula sparked controversy.
That “dark side” of the daigou business has come into even sharper focus as panic-buying sparked by COVID-19 has emptied shelves. A video showing a small group of Asian people piling dozens of tins of formula, and another of an apparently Asian family showing off their Aladdin’s cave of hoarded food and other supplies, have sparked online outrage.
The phenomenon of organised busloads of “locusts” descending on regional Australian towns and “raiding” local supermarkets has stoked fury all the way to the highest levels of government. Home Affairs minister Peter Dutton has vowed to “come down on them like a ton of bricks”.
It doesn’t help that photos snapped of the “raiders” show clearly Asian faces. But there are just as many videos and photos of non-Asian panic-buyers with huge stockpiles. Besides, it doesn’t take many organised people to clear out a supermarket. Even half a dozen people in a hired bus can strip shelves by walking in and out with a few items at a time, as per the baby formula video.
What’s going on here? Are the daigou businesses just responding to panic-buying-induced shortages? Or are unscrupulous profiteers copying the daigou model? Peter Dutton hinted that the raiders may be linked to criminal gangs.
Whatever is going on, it’s creating outrage and social division that Australia (and New Zealand) just doesn’t need, right now. Obviously fake profiles are popping up on Facebook, pretending to be “Chinese export” businesses.
There are millions of ethnic Chinese in Australia, almost all of whom aren’t involved in this nonsense. They don’t deserve to be tarred by the actions of a handful of their fellows, any more than ordinary Chinese deserve blame for the horrors perpetrated by Beijing.
We are all in this together.
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