Strategic Decoupling
Australia's economic dependence on China is not merely a commercial relationship — it is a structural vulnerability. The 2020 trade restrictions demonstrated it: barley faced 80.5% tariffs, wine 218.4% (destroying a A$1.24B market). Yet the asymmetry in iron ore is the reverse — cutting off China would cost Australia A$6.2B GDP versus A$150B for China, a ratio of 24.5:1 in China's favour. The managed decoupling strategy maintains iron ore and LNG trade (where China cannot easily substitute) while building sovereign processing capacity for critical minerals and diversifying exports to India, Japan, South Korea, and ASEAN.
Progress toward the Programme target — 0 means the transformation hasn't begun, not that capability is zero. Today's position is in the figures below.
Tracked Variables
China Share of Australian Exports
29% of exports go to China (A$189B, FY24-25) — no other advanced democracy sends a third of its exports to a strategic rival. Iron ore (87% to China) is Australia's leverage: China relies on it for 63-65% of imports and can't replace it, so it was never sanctioned. But a broad trade war cuts the other way — ASPI models an all-out attack at ~6% of Australian GDP vs ~0.5% for China. The 2020-24 coercion campaign (the "14 grievances"; wine tariffs to 218%, A$1.24B→<A$1M) was absorbed: total exports to the world fell just 0.2% as coal/cotton diversified. Managed decoupling — keep commodity revenue, build sovereign critical-minerals processing (95% of lithium ships to China for 10-15× value-add), cut import reliance. Milestone: iron-ore-to-China <70% by 2035. As a DETERRENT the supply asymmetry is decisive: an iron-ore cut-off would cost Australia ~A$6.2B in GDP but China ~A$150B (24.5:1, iron-ore-specific) — collapsing 40-50% of Chinese steel output within 90 days, since mills hold only 30-45 days and re-sourcing takes 3-5 years. Paired with interdiction of China’s Malacca oil chokepoint (80% of its 11.6M bbl/day imports), the book frames this as a profoundly asymmetric "mutual assured economic destruction" — leverage, not just dependency.
Australian Lithium Refined in China
Australia mines roughly half the world's lithium yet ships ~95% of spodumene to China for refining — surrendering the 10-15× value-add and depending on China to process its own resource. Target mirrors the simulator's own 60%-onshore anchor + Australia's Critical Minerals Strategy.
China Share of Solar / Clean-Energy Hardware
96% of Australia's solar-panel imports come from China, plus ~60% of smart inverters (a cyber-risk vector) — the renewables transition swapping coal dependence for Chinese supply-chain dependence (book Ch 21).
China Share of Australian Goods Imports
ESTIMATEChina is Australia's single largest source of imports (~A$120B in 2024-25) and supplies the majority in many manufactured categories — machinery, telecoms, electronics, vehicles. The platform previously tracked only EXPORT share; this captures the import side the book calls the "under-attended risk". The diversification target is provisional pending the exact one-way goods figure from DFAT.
China Control of Critical-Minerals Refining
ESTIMATEChina controls ~90% of the critical-minerals refining Australia's supply chains depend on — rare-earth separation ~90%, gallium ~99%, graphite ~100%, magnets — the inputs to defence electronics and munitions. A single index across the basket; target = no chokepoint mineral majority-China. Provisional index value.
Recent Intelligence
Lithium is Australia's second-largest export resource and critical to global battery supply chains. If Australian miners and manufacturers can capture downstream battery-production capacity, Australia transitions from raw-resource exporter to strategic materials processor, reducing Chinese control over a critical-technology supply chain and strengthening pillar 1 (Resource Sovereignty) and pillar 5 (Decoupling).
The article warns against reliance on Chinese subsidised AI models, which directly concerns Pillar 5 (Decoupling) and Pillar 3 (Industrial Base). Australian defence and critical infrastructure sectors building dependency on Chinese-controlled AI infrastructure creates a supply-chain vulnerability and reduces sovereign capability to sustain military and civilian systems in a contested scenario.
This article demonstrates US commitment to strategic decoupling from China in critical defence inputs, which underpins confidence in AUKUS delivery and broader Indo-Pacific security architecture. For Australia, a more self-sufficient US defence industrial base reduces the risk that Chinese export controls or supply disruptions could degrade allied capability, directly supporting Pillar 5 (Decoupling) and Pillar 7 (Alliance) resilience.
Antimony is a rare strategic mineral critical to semiconductors, defence electronics, and battery systems—core inputs to military equipment and critical infrastructure. Australia's dependence on foreign antimony supply (particularly China) without domestic processing capacity exposes the nation to supply disruption during conflict or strategic competition, directly undermining Resource Sovereignty and Decoupling pillars.
An Australian advanced-materials producer being forced to exit the US market due to tariff policy indicates deterioration in US–allied industrial integration and reliability as a market anchor. This undermines Pillar 3 (Industrial Base) and Pillar 5 (Decoupling), while paradoxically demonstrating US policy unpredictability that erodes the foundation of Pillar 7 (Alliance).