Taking on a giant in a spat? Take stock of your weak spots first

THE trade and diplomatic stoush between Australia and China holds important lessons for everyone reliant on exports to a single market, however lucrative that it may be.

For decades, Australian farmers and miners have been happy to sell their goods in the China market and to scale up their production to meet the appetite of Chinese consumers, with nary a thought about the risk inherent in becoming overly dependent on a single buyer. By 2019, China had become Australia's top export market, worth US$104 billion.

There were warning signs. Trade relations between the two countries turned sour in 2018 after Australia became the first country to ban China's technology titan Huawei from any role in the development of its 5G network, ostensibly on national security grounds. Trade and diplomatic ties began to spiral downwards after that, with raids on the homes of Chinese journalists in Australia and retaliatory measures by Beijing, culminating with the arrest of an Australian-Chinese journalist in Beijing, again on putative national security grounds.