Subs don’t scare China. Iron ore does

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The propaganda around AUKUS is something to behold. The treasonous AFR leads us off:

Australia will spend up to $368 billion over the next three decades to buy a fleet of eight nuclear-powered submarines, combining with the US and Britain to discourage Chinese military adventurism and preserve regional peace and prosperity.

As China lashed the agreement, US President Joe Biden declared the three countries were putting themselves in the best position to navigate the challenges of today and tomorrow, while standing alongside Anthony Albanese and UK Prime Minister Rishi Sunak at a navy base in San Diego.

Yawn. As if eight submarines, nuclear or otherwise, make any difference to China. At last count, it has 56 of them.

The import of the AUKUS deal is not in the submarines. It is in the increasingly intense tie-up between the Australian and US outlooks.

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How should we use this power in Washington? The answer to this question is what matters to China.

Australia’s only true power over China is not military. It is dirty.

Steel is the heart of the Chinese economy and power. Iron ore is steel. The Pilbara is iron ore. Nothing is going to change this.

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If the shooting starts, cessation of this trade is the only hope Australia has of inflicting any damage in China. Ending the trade will end the Chinese economy and a civil war between the CCP and everybody else is the likely outcome.

This is the point we should be driving home to Washington. That economic blockade is how to win this war.

Without firing a shot in anger and without risking our young people’s lives, let alone a nuclear holocaust.

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Arguably, we should cut it off now.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.