It’s clear that China has chosen to bully Australia in 2020.  Australia has been outspoken in criticising China over many issues (Uyghurs, Hong Kong, Huawei, espionage, Confucius Institutes, mistreating Australian journalists, claiming international islands in the South China Sea, Belt and Road Initiative) and has also appeared to be a henchman for US foreign policy.  Using the Chinese proverb, ‘Kill one, scare 100’, now China has responded by bans and tariffs on all sorts of exports, using Australia’s treatment also to scare other countries. 

Clearly China is a much stronger economic power than Australia.  But, rather than give in on important ethical and moral issues (though we have so many problems ourselves, we can hardly take the high ground), what might happen if – instead – we tried to live without Chinese exports or imports.  What if we stopped trading with China?

Main Export Casualties:  Iron Ore, Gas, Coal, Agriculture, Education, Tourism, Wine

Minerals exports worth $80bn dominate our exports to China.  Agriculture ($14bn), Education ($12bn), tourism ($11bn) are other major exports, with wine at $3bn.  Exports to China represent 30% of all students at our universities, 25% of agriculture exports, and is also our main tourism and wine export market.

Main Import Losses:  IT and Telecom Goods, Furniture, Homewares, Clothing

By comparison, we import less from China, but the product range is very large, covering mostly elaborately transformed manufactured goods.  IT and telecom products ($21bn) are the main imports, followed by home and office furniture and homewares including electrical goods.  Surprisingly, clothing is not listed as a major item, though clearly much of our clothing does come from China.

What If We Stopped Importing from China?

As a retaliation, at first, this would seem to be catastrophic.  But, as covid has shown us, crises lead to great innovation. There is now a real desire for more local sourcing, as we have become aware of our vulnerability from global suppliers and as unemployment has soared. 

We used to be a major manufacturer.  Covid showed we could quickly manufacture again (plastics, PPE, vaccines).  Yes, it would be more expensive, but we would be employing Australians, re-skilling and becoming less dependent. 

Alternatively, we could find new sources.  Other Asian countries are low cost providers and Europe have always provided quality.  As prices increased, we would buy less, reducing our consumption, improving our environmental performance (less resource use, less waste, less carbon emissions, less transport kms) and our balance of trade simultaneously.

Though it would be painful and take time, there are other suppliers of all the goods we need and we are capable of supplying most products locally, if we are prepared to pay.

What if We Stopped Exporting to China?

Our few major mining companies (BHP, Rio Tinto, Fortescue) would take a big cut in short-term revenue, but they actually employ relatively few people, so few jobs would be lost.  These products can also be stockpiled, so sales might only be deferred, if new markets could be found.

Agriculture would be more problematic, as products have shorter lives, but even these could be stockpiled for a year or more, while seeking new markets.  (Remember the great wool and wheat stockpiles of late last century?)  New markets could emerge quickly, as China’s favoured suppliers could be replace in their old markets, albeit perhaps at lower margins. 

Much of the wine going to China has been lower quality lower margin wine (the pictures of Grange Hermitage are nice, but this is not the main market).  Wine can also be stored, so short term lost sales may return in later periods, especially if new markets (India?  Asia? New wealth segments?) can be developed.

Our education industry would have huge revenue losses too, but more local students could be enrolled and diversified marketing might attract a more diversified student mix than currently exists, with Chinese students dominating.  Reduced international student numbers might also lead to improved quality, as many short cuts have been taken to enrol marginal high fee paying students.  Teaching jobs would be lost, but many of these would be part-time or casual tutors.  The 2020 covid experience showed the system could survive a huge operational upheaval.  Online teaching might also increase new international opportunities.

Tourism from China has grown rapidly, but much has been run by Chinese-based operators on Chinese-only group tours arriving on Chinese airlines, providing little economic value to Australia.  In the short term, covid restrictions on international travel mean Australians will replace internationals travelling Australia so our ‘import’ costs (Australians travelling overseas) are reduced and replaced by similar spending within Australia, boosting local tourism, counteracting the fall of international travel.  The loss of Chinese travellers (or any other specific nationality) is not catastrophic overall.

The Outcomes?  Bad for China!

Clearly a complete ‘sanction’ on trading with China would be extremely disruptive.  Equally clearly, we have the means to replace imported products and diversification of exports is also possible, albeit with some time lags. 

A more likely long-term outcome is that China is creating the seeds of its own power demise.  Bullying one country leads others to be more wary.  Future Chinese exports will be jeopardised through perceived increased political risks.  China will be viewed as an untrustworthy trading partner, reducing its future economic and political power. 

China seems too smart to continue down this track for long.  Standing up to China will be perceived well and, after robust negotiations, China will back down on most demands.  Worse for China, never will we trust it again, as we have over recent years.  And our economy and society will be the better for it in the long run (this applies to being dependent on any other country, not just China).


Why Do Powerful Individuals Abandon Their Principles to Support Dictators? (Why Do Republicans Support Trump?)

We often wonder how once reasonable people end up abandoning their principles and support obvious dictators and despots who are only concerned for their own gain.

Anne Applebaum’s article* in ‘The Atlantic’ suggested common reasons.  She used historical situations to explain why the US Republicans have supported Trump, despite what is obvious to most of the world – that Trump is shaping the US into a dictatorship, despite the apparent democratic processes and institutions that exist there.  As this process is also occurring in a large number of countries (eg China, Russia, Venezuela, Hungary, Poland, Philippines), it’s worth looking at why individuals might do this.Read More »


We are all very concerned about the spread of CV, the overall risk to us and the chance of personally dying.   Information from the Department of Health’s reporting (health.gov.au – coronavirus current statistics), as opposed to the media and pictures you get, show that the real story is significantly different from people’s fears.  Do the facts justify the current set of actions?  What should be/should have been done?Read More »

Trump is a Success. Forget what he says. Look at what he does.

Liberals (including me) hate Trump.  We look at what he says, his fallacies, inconsistencies, morals, the people he chooses, the processes he uses.  But liberals fail to look at his amazingly successful achievements – what he does.  He is on his way to being one of the most successful, influential US Presidents of all time, rather in the way that Reagan influenced world economics and politics for over 20 years.Read More »

The Silent Chinese Invasion of Australia

Respected thinker Clive Hamilton’s new book, ‘The Silent Invasion:  China’s Influence in Australia’, is very scary essential reading.  This book’s deep research opened my eyes to China, especially now that Xi is President for life.  It’s essential reading because it exposes so much that has long term impacts.  If we don’t recognise these factors soon, it may be too late.Read More »

Rethinking Recycling, as China Pulls the Plug

Following the irony of environmental leader China (??) refusing to be the recipient of the world’s ‘recycling’ rubbish, Australian government responses seem to be:  ‘OMG, we’ll have to stop recycling’.  Another chance for Australia to be a world leader looks like going begging.  Surely there’s a better response than putting our head in the sand, as plastic and other recyclable products pile up on ocean beaches, in fish and in us, all over the world.Read More »

Brexit: From Great Britain to Little England

To an outsider, the difference between being in Britain and Europe is striking.  In Brtain, people talk about ‘Europe’ as if it were a foreign place.  In Germany, France, Spain, Italy and other EU countries, ‘Europe’ is something they belong to, even if they also have a stronger allegiance to their own country.

‘Britain’ and ‘Europe’:  different perspectives

The Brits never seemed to really embrace being ‘European’, even after 40 years.  They have seemed to still see themselves as a world power, though their power is largely historical now.  There were times when the heads of Germany, France and Britain stood together as the guiding lights of the EU but, under the Comservative Party, they have stood outside, criticised the EU and – without seeming to realise it – become secondary players in the EU, let alone the old imperial world they seem to long for.

The Brexit vote shocked me though.  I believed the bookies.  I thought they’d go to the edge and pull back, as the Scots did when given the chance for independence. But it has happened. And even if the Brits find some way to back out of it now, their reputation in Europe is damaged irreparably.

Which is why Great Britain will become Little England.  They will get their independence back, but they will  cease to be an integral part of the largest market in the world.  Companies wanting to be part of Europe will expand their European subsidiaries rather than their English ones. The Brits will lose their cheap skilled European work force from Eastern European countries as they close their borders to immigration.  They won’t be consulted or counted in the big political decisions made between China, the US and the EU.  The pound and UK stock market will probably drop as financial and economic uncertainties prevail, at least in the short term.  Brits will find all that international travel they love to ‘cheap’ European places will become more expensive, as will imported consumer products.

The strangest part really is that the leaders of Brexit campaign have suddenly departed the stage, when victory was theirs.  This political vacuum – to be filled by unknown future leaders not particularly committed to Brexit themselves – is bizarre and not helpful in building a strong, clear new direction.

Will Little England be better than Great Britain?

But it may not all be bad.  Being a little country can be good, so long as you don’t want to be a big player.  Look at Switzerland, Sweden, Australia.  A falling pound should encourage investment and tourism in the long term.  Foreigners can buy up the country.  Maybe ‘hot’ international funds from Russia, the Middle East, international despots will flow in to buy property and assets that have suddenly become much cheaper (though they have already done this, since the UK refused to join the Euro currency zone).  Tourism hordes will descend on this unique olde worlde place with its royalty still centre stage. International students seeking English language study might choose England over the US, Canada and Australia.

Whether these are the impacts you want is moot, however.  Most countries really want a strong currency, enabling them to buy what they want overseas and have cheap imports.

Transitioning from ‘Great’ to ‘Little’

But if you have been a ‘big’ player on the world stage, it’s not easy to adjust to being a small player.  And being independent sounds powerful, but it’s not, in this interconnected world.  To be powerful, you  can’t withdraw.  You have to interact with others, play the main game, not a secondary game.  Compromise, not take your bat and ball and go home.  Be diplomatic, not throw sand in the face of your peers.

So, Great Britain, welcome to being Little England.  Being insignificant in the world.  You could have been powerful, but you chose not to be.  You could have been admired, but you chose not to be.  It’s a long way back to the top when you are on the way down.  Just ask the Greeks, Romans, Norwegians and Austro-Hungarians.


Iraq War Championship Results: Australia 3 UK 179 US 4,500 Iraq 500,000

The European football championship is almost over.  22 teams have lost and only France and Portugal are left, though it is possible to argue that Iceland and Wales are winners, given their expectations.  But an analysis of the 10 year long (some would argue still continuing) Iraq War Championship – the Chilcot Report – was released this week.  Many have wondered just who ‘won’ this event, but Chilcot made it clear.  Everyone lost.  And Chilcot explained why.Read More »