Abacus | As China’s blockade unravels the Australian economy, everything is at risk

I have been a frequent visitor to Australia, taking in and enjoying the local culture. Even back home, I enjoy the occasional evening of Aussie TV news and interviews with their entertaining, front-footed, “no punches pulled” style.

When I started flying down to visit, just over thirty years ago, I was impressed at how Australia was largely self-sufficient when it came to food, manufactured goods and infrastructure. There was a clear pushback against imports, as there was against immigration, and a keenness to support local businesses and protect all things Australian.

However, like most developed economies, there has been a creeping rise in Australia’s dependence on manufactured goods from abroad. Aussie consumers seeking lower prices were eager to buy goods from countries with cheap labour, essentially exporting pollution to someone else’s backyard. Meanwhile, businesses and the government were perhaps too eager to sell off Australian assets to foreign buyers and focus exports on the globe’s biggest client, China.

The tide turning against Chinese goods in Australia did not come as a huge surprise given the shifting geopolitical winds, but I was taken aback that China fuelled this particular fire by enacting what could be interpreted as a trade embargo by blocking the imports of multiple Australian goods. If the countries stay this course, it would be a sharply negative development after they just five years ago signed the China-Australia Free Trade Agreement (ChAFTA), which had taken nearly a decade to put into place. The knock-on effect would be far more serious than just shutting down the trade agreement in a huff.