How Australia‘s economy can keep shrugging off Chinese bully tactics

Australia has done a Dustin Martin-style fend-off to China’s economic bullying, so what is the Chinese Government thinking now and what happens next?

The AFL superstar footballer is renowned for shrugging off attacks with his trademark “don’t argue” stiff-arm tactic before kicking goals, and this is being mirrored by our national economic and export performance.

China’s efforts in the past year to bash up our coal, barley, beef, wine, lobster and other exporters with trade bans and other penalties sparked fears for Australia’s economy, but the reverse has happened.

New data shows our economy is growing, unemployment is falling fast, confidence among consumers and businesses is high, the sharemarket is flying, and Aussie exports hit a record high in the first three months of this year.

Most of the export gains have come from iron ore, which China still needs to make steel, and liquefied natural gas – more than offsetting the export falls in other industries.

AFL star Dustin Martin has been fending off attacks for years. Pic: AAP Image/Julian Smith

China started its one-way trade war with Australia because it was unhappy with several of the Federal Government’s political moves around COVID and national security, but its economic attacks are clearly not working.

But they are leaving a sour taste in the mouths of many Aussies – particularly those in our wine and lobster industries who have been smashed – and the big question now is what will it do next and will it show some sympathy?

Probably not. While China is Australia’s biggest trading partner, we’re not alone in that regard, as its sheer size makes it the biggest trading partner of many countries ranging from the US to New Zealand – which is adopting a small-target approach and avoiding poking the bear.

The Chinese Government is busy with several other battles right now – often with Australia’s allies – and it’s known for playing a long-term geopolitical game, so we probably shouldn’t expect a backflip any time soon.

The big potential threat is if China finds a way to wean itself off our iron ore and energy – perhaps through ventures in Africa and South America. If it cuts off those exports, Australia would be in real trouble.

Fortunately, the future is in our hands.

Australia is in a brilliant position to capitalise on the push towards a zero-carbon world thanks to our abundance of renewable energy. Plans to send Aussie solar energy to Singapore via a giant undersea cable are a great example.

Our richest man, Andrew Forrest, is championing a move to steelmaking powered by green hydrogen, which has water as its only by-product.

This means instead of sending our iron ore offshore to China and elsewhere as a raw material, we multiply its value by making the steel ourselves and then export that to countless countries that need it.

It could transform Whyalla, WA’s Pilbara region and other steel and energy centres around Australia.

We can shape our future with big-picture thinking, and it’s great that some of our wealthiest people are on the case.

Meanwhile, the China trade bumps continue.

While good Aussies businesses are getting hurt, remember that this battle is between governments, not their citizens. Our people have worked well together over three centuries, and hopefully that will continue peacefully.