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Australia & China: Disengagement or Decoupling?

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  1. #11

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  2. #12

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    One card that Australia still has up it's sleeve is iron ore. China needs it, and Australia is the only country that can supply it in the quantities that China needs.

    https://www.news.com.au/finance/econ...d5ce88b359db43

    AsianXpat0 likes this.

  3. #13

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    They only need iron ore when they are growing.

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  4. #14

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    Quote Originally Posted by twelve98:
    Couldn't agree more.

    Having said that, IMO China hold all the cards in this. the Australian economy needs all the help it can get right now...
    Have to agree. Australia is one of the most dependent Western economy on China. Australia in the past has managed to ride on the coat tails of the booming Chinese economy and its insaitable appeite for minerals that Australia has such an abundance of. Now however, Australia is realizing the drawbacks of putting all their eggs on one basket.

    Now the question is, does Australia really have no cards to play? Iron ore being the sole trump card is a pretty weak hand...
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  5. #15

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    Don't forget milk!

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  6. #16

    Seems the two cases are related - they wanted to question them about Cheng Lei. Australia has no accredited journalists in China at this point - extraordinary.

    Quoting from the FT story referenced in the tweet.

    The Australian Financial Review reported that both journalists were asked questions about Ms Cheng by state security officials.

    On Tuesday, China’s foreign ministry confirmed Ms Cheng was “suspected of engaging in criminal activities endangering China's national security”, without elaborating. It added that the questioning of Mr Birtles and Mr Smith was conducted “according to law” in the context of a “normal law enforcement action”.

    https://twitter.com/YuanfenYang/status/1303222799897567232

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  8. #18

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    BBC confirming the national security angle...

    https://www.bbc.com/news/amp/world-a...mpression=true


  9. #19

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    Quote Originally Posted by Coolboy:
    Have to agree. Australia is one of the most dependent Western economy on China. Australia in the past has managed to ride on the coat tails of the booming Chinese economy and its insaitable appeite for minerals that Australia has such an abundance of. Now however, Australia is realizing the drawbacks of putting all their eggs on one basket.

    Now the question is, does Australia really have no cards to play? Iron ore being the sole trump card is a pretty weak hand...
    China needs to buy its stuff from Brazil, or buy more and deal with more impurities, etc. China pays a few percent more (a lot more if some goods have no close competitors. Then Brazil could really jack up the prices to China...) Then the markets that Brazil used to supply will open up to Australians. Barley gets blocked, it goes to India or back into Australia as feed, etc. Maybe receive a few percent less on the deal.

    If you are small open economy selling commodity items, you sell the good on the open market for the next best price. It's not like they customized the good for China and China was the only market in the world for those goods.

    You can always slap a 20% import duty on made-in-china Goods, or add some new random tariff import rule, so do more "random" spot checks. Or force all made-in-China goods to be loaded in some boon-doggle port, with no deep water access, no rail and a dirt road for freight trucks and only put one custom inspector that needs a seeing eye dog, works half days, etc.

    Then your Australian retailers source their stuff from other-places than China, say Vietnam, Bangladesh, India, etc. Start yet another trade-war and ding your own export suppliers. Swings and round-abouts. China goes complains to the WTO, drags out for a few years... Australians don't generally play that game, but Trump and China has opened up a Pandora's box of retaliatory trade measures.

    I don't think Hong Kong has approved the Australian consul-general for like 6+ months... No visa approval.
    Coolboy, Skyhook and mrgoodkat like this.

  10. #20

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    Quote Originally Posted by shri:
    Like a lot going on these days, I have no clue if there is an end game on either side and simply cannot speculate about what will happen next.
    That's not really how any of this works. China probably thinks it has an end game, with the middle Kingdom rightfully ruling over the barbarians. Then they make a move and realise that the rest of the world doesn't play by XI's rules. The confusion of China how a small country like the Czech Republic can just send an official to their renegade province is only matched by the Tory confusion about the Irish not knowing their place.... They might have a game in mind but are running out of players.

    Australia meanwhile, like any democracy, is driven by loads of different interests. Mining probably isn't even the biggest one right now, education might be. Chinese tuition fees made Australian universities rich. At the same time, academia is the perfect place for China-bashing - anything western academia values is suppressed in China

    TL,DR - it doesn't matter what endgame people have in mind. What is happening is largely out of their hands.
    mrgoodkat likes this.

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