Pearls and Irritations

Nick Deane “reflected on the troubled waters of the South China Sea,” concluding that we need to pay close attention to what our military alliance with the US may drag us into. War between the US and China would necessarily involve us, but not necessarily to our advantage. While for ordinary citizens, such an eventuality would be horror beyond comprehension, it doesn’t seem to trouble some of our leaders intent on spending a fortune on a dozen submarines with the capacity to interdict shipping in China’s near-coastal waters. The advantages of such projection of military power are not immediately clear but have doubtless been carefully tallied.

From the Australian point of view, we need to consider another aspect to the (hopefully negligible) risk of hostilities between the major Pacific powers. Specifically, we would be incapable of taking part because of the immediate devastation of our industrial, military and agricultural capacity. I don’t mean the PLA would bomb us, I mean that we no longer have the industrial base to conduct a modern war.

For example, when the GMH and Ford plants close next year, this country will not have any capacity to manufacture engines or drive trains (gearboxes, differentials etc). How anybody expects to maintain hostile operations without engines has not yet been explained. Similarly, we do not manufacture aircraft of any sort, and we don’t even manufacture drones for long-range surveillance. We don’t, of course, have any capacity to build or operate satellites whereas China has a demonstrated capacity to shoot them down.

It’s not just your actual warfare that would be affected by having no home-grown engines, our highly-mechanised and energy-intensive agriculture would quickly come to a halt, as would our long-distance transport systems. We could probably get a tractor plant going in a few years but building truck gearboxes and differentials is very, very complex. There are only a few dozen such factories in the world, and we don’t have one. Our fishing fleets also depend on foreign engines, pumps and electric motors, but that raises another question, our lack of local electronics industries.

It is doubtful that we manufacture microprocessors in this country but every radio, every radar, phone, computer and you name it depends on them. Modern telephone systems are little more than interconnected computer systems. Cameras, photocopiers, TVs and all the other paraphernalia we and our military forces take for granted originate overseas and it would take us many years to build up a sufficient industrial base.

Modern hospitals, for example, are heavily dependent on the electronics industry. Without microprocessors, there are no Xray machines, no scanners or ultrasounds, no ECGs, no biochemical analysers, no anaesthetics machines, nothing. Chloroform, anyone? Similarly, our pharmaceutical industry largely consists of repackaging drugs bought overseas. The lead time for a sophisticated drug factory is up to eight years. We do not manufacture surgical instruments or prostheses, syringes or other essentials. A very large part of these supplies are, of course, sourced in China. Medically, in the event of hostilities with our largest trading partner, we would be back to where we were in New Guinea in 1942.

Just from the point of view of our imports, hostilities with China would bring us to our knees in very short order, but what about our exports? Well, who would buy our mountains of wheat, our wool, our coal and iron ore? Our primary and our extractive industries would grind to an immediate halt, bankrupting huge numbers of companies, family farms and individual workers. If there were no miners at work, an avalanche of properties would hit the markets as banks foreclosed on heavily-leveraged investment properties. Next, the building industry would come to a halt, and not just because all our toilet pedestals now come from China. And if nobody borrowed to buy houses, the banks would quickly go out of business because that’s such a large part of their activity.

The notion that one industry exists in isolation from others is dangerously outmoded thinking. If we learned anything from the Global Financial Crisis, it should be that economies are vastly complex systems in which the Law of Unintended Consequences applies with a vengeance.

Talking of our military interests as though they exist independently of our commercial ambitions is naive in the extreme. Militarily, we may be just a large overseas base for war plans written in the Pentagon but economically, we are a client state of China. We maintain an enviable standard of living just because of our integration with the Chinese economy. If we do anything to endanger their interests, they can bring us down further and faster than we can them.

Niall McLaren is an Australian psychiatrist, author and critic, not necessarily in that order.

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