"The sky is falling" cried Chicken Little.
The media loves creating panic - bad news sells. For example, China is playing with quite a small $ amount with our exports. They have not stopped importing coal, they have only stopped importing thermal coal, which is only a small part of our coal exports to them (a few billion, not $13). More than 80 per cent of Australias iron ore exports go to China - so yes we would be sensitive there if they shut off overnight. However that accounts for 60 per cent of Chinas supply, so they would have to be undergoing economic collapse to do it. They could do it over a few years, probably at some economic costs to themselves, but not overnight - it takes time for others to ramp up our production levels, put train-lines to their coasts etc. And exactly what do we lose - mostly tax and royalties (not insignificant of course), but relatively min or employment (more than 70% of western economies now are service industries). In terms of export income, of our three largest 'Australian' miners, foreign ownership accounts for 75% of BHP-Billiton, over 80% of Rio Tinto and 100% of Xstrata. And of course who is big on the Brazilian iron ore scene - BHP-Billiton.
I am not suggesting that it is not a worry, things are going to be less rosy here for some time, but things are not as obvious as they seem. China's population will not peak for at least another 10 years, but in hand with that is its economic growth as the standard of living of its people continues to grow. China continues to be the only economy in the world to show positive growth in 2020 as its GDP is predicted to expand "The world's second largest economy expanded 4.9% in the July-to-September quarter compared to a year ago, according to government statistics released Monday. The pace was quicker than the 3.2% increase that China recorded in the second quarter, when it managed to avoid the pandemic-fueled recession that has gripped much of the globe". Even our own estimates of China show good positive growth (theirs might be a bit shaky) worst estimates for 2020 being 1.9 percent this year, consistent with remote sensing that indicates that they really do have covid under control, and have kept their economy running. They cannot turn off the taps on coal, iron ore and food overnight. Although we like to present Belt and Road as some sinister world takeover, it is clearly primarily a fairly desperate attempt to ensure adequate resource supply for a growing China in the future (the negatives are consequences that we view as unfavourable because it increases Chinese economic importance relative to the USA on the world stage as a consequence).
Now where do I live - is it some largely snow and ice-free island in the Pacific, that produces the second-largest amount of gold in the world, that has no covid and at present one of the world's best economies, where the governments have tried to behave rationally, with some success and bipartisanship, and where people have not had to recover from major wars and invasion (apologies to indigenous people, I am aware of history)?
Perhaps I should emigrate to Indonesia, because it is so much better....? I think I will just stay here and work with my fellow Australians to fix any problems as they arise. Because overall I like them and the way they do things.
