Some of you probably think I’m going to write about tax. Or the lack thereof.
Or, the sad history of BHP and RIO taking the piss out of Australia. Including, but certainly not limited to, writing their own tax code after rolling the Kevin07 government.
But, no, it is not that, either.
The reason that the big miners are now Australia’s deadliest enemy has to do with the future, not the past. It is about what path we decide to take in defense of our liberal democracy versus the encroachments of China.
There are two paths to dealing with China.
One is military and a disaster to our youth, culture, prosperity, and national interest with extreme and unpredictable stakes.
The second path is economic, which will also test the nation to its limits, but our way of life can survive it.
The recent AUKUS decision has put a foot on both paths. It has integrated our force projection capability fully with the Americans. Anybody saying otherwise is a fool or a liar.
The question now is, what do we do with this integration? Do we march hand-in-hand with the US into the China wars? Or do we use the power that the AUKUS deal gives us to push it down the economic path?
Ostensibly, this sounds suicidal. Why would Australia, the greatest single economic beneficiary of the rise of China, campaign for an economic war on the same?
Because it actually offers better outcomes for the national interest.
If China does invade Taiwan, and it probably will as its economy fails, engaging it militarily has apocalyptic outcomes.
The war would be unbelievably expensive. It will be fought on multiple fronts including the Korean peninsula, the Middle East, the Straits of Hormuz and Malacca, Ukraine, and the South Pacific islands.
Owing to the importance of the Sino/Russian alliance and shipping lanes guarded by China-friendly dictatorships, there is almost no way in which the war is not instantly global.
That is before we even discuss nuclear outcomes and the possibility of the US losing.
These are risks on an altogether greater scale than anything faced in generations. Such a war fought over a domestic conflict between China and Taiwan is clearly not worth it.
But, Taiwan is a liberal democracy so any move to crush it cannot be dismissed, either. Nor should it be seen as a one-off. China has made its plans for regional and global hegemonic control abundantly obvious. This is an existential threat to our way of life.
So, any Taiwan conflict is also a rolled gold opportunity to end the Chinese empire before it really begins. And it can be done without firing a shot in anger.
If the US and allies (including Europe) were to apply the same regime of sanctions to China as it did to Russia post-Ukraine invasion, beefed up appropriately, then the Chinese economy will collapse.
This will include a blockade of all Australian commodities to China, and Western imports from China.
Combined, this will crush both domestic and external demand in the Chinese economy. Some 60-70% of activity will be compromised or gone. The outcomes are unknowable but may well include a civil war on the mainland.
Yes, it will cost us dearly too, which is where BHP and RIO come in because they will resist this outcome tooth and nail. They’d obviously prefer we keep selling China iron ore to come back as missiles, and keep buying useless military hardware with the proceeds.
But the price of letting the iron ore majors go bust is not nearly as dear as a world war.
