Reaction is not very bright

The weakness of the Coalition's reactive approach, where it doesn't know what to do unless Labor proposes something, is clear with Barnaby Joyce's opposition to any Chinese investment in Australia.

Rather than just respond to today's story, there is a real need for a consistent policy on Chinese investment, the way that the Menzies Government and the Liberal governments of WA developed policies on Japanese investment that benefitted enormously both Australia and Japan. Saying no all the time is no better economically, diplomatically or in any other way than saying yes all the time.

The need for such a policy is much more important than the unproductive journosphere cliché of split shock, which has no entertainment value for its being so lame. Neither of these people understand foreign investment policy and they need to give the impression that they have some clue before they can be entrusted with the economic future of the country. In one of the best articles on Australian economics in recent years came this key piece of information:

The Treasury secretary, Ken Henry, and the Reserve Bank governor, Glenn Stevens, have warned of a re-emergence of the "two-speed economy".

According to Henry, the emergence of China and India as the next economic powerhouses has caused a structural change in the Australian economy that could last decades. As voracious buyers of our minerals and cheap suppliers of manufactured imports, they have boosted our terms of trade - what we earn from exports against what we pay for imports - in a permanent way ... According to Henry, this is a tectonic shift in Australia's economy.

No wonder the Coalition hate Henry - he sees things as they are and sets policy according to that, rather than waiting for government so you can gainsay whatever it might be. Get a clue, then get a policy, and only then might people take you seriously.