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Bad times coming

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Gem in I said:
So i guess the one child policy won't be back on the agenda (incredibly cruel as it was).
I would like to ask your educated view goldirocks of what if we stopped exporting iron ore to china as they rely on it so much.
I mean our other exports recently are obviously insignificant as i'm feeling that's how we have been viewed by china for a long time now it's just becoming more obvious to more australians (we may have been riding the pigs back for a few years now).
Note: If you already explained it in previous post please dumb it down for me respectfully :)
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i'm no expert on that, just part of my job used to be monitoring international mineral economics for a client.
I think the smart thing would be to not let China get away with it, but follow normal channels such as ITO challenges against their claims. From memory they are around 30% of our exports of all types and we are around 3% of theirs, so guess who would come out worse if we tried not exporting iron ore (they take about 60% of our iron ore exports)? One of the problems is that China is a major producer of iron ore itself, so could probably rapidly boost internal production in the short term for a little while, and it also trades heavily with Russia, which together with Brazil and South Africa would probably increase production over a few years.

1608111751_china_iron.jpg


My meaning was that they are not breaking us, just making life hard for us. I see no advantage in making our lives harder - "are you going to cut off your nose to spite your face", my mother would have said. We have the problem that we export around 60% in minerals, 20% in agricultural, and much of the remainder is tourism and foreign students, dominated by China.

A purely personal opinion is that we should politely take international action through normal trade channels (not let them get away with it) while trying to increase other markets for our goods (not easy - Brexit may help but the nations involved are not rapidly industrialising like China). Hopefully India might become a market. What we should not do is keep shooting our mouths off at every opportunity - countries do not have to be great friends or ignore human rights etc to trade with each other. Whenever dealing with a miscreant of any type who you actually need, it is good policy to let them save face to some degree, not stick the boot in - and you still have some influence with someone if you are not kicking their teeth in. More so with China that has a long memory of its mistreatment by the west going back to before the Opium Wars when the West (primarily Britain) tried to addict their population. We are a younger country by far as a political entity and easily forget such things. We have singled China out on many issues (take our unwise sale of Darwin Port - we somehow accept our government making China a villain in the piece when they simply invested using our laws, in what is not a naval port (that is an adjacent area where we have settled the USA in), where they were going to build a large tourist hotel. Similarly with foreign land ownership (the Netherlands and Singapore each own more Australian land than China, the island of Jersey nearly as much). So softly, softly, while trying to reduce our dependence and improve relations a bit. Hotheads rarely win in the long term.
 
Reg Wilson said:
Our idiot government is incapable of dealing with China. All we do is America's bidding in poking the dragon while our good mate Uncle Sam steals our trade through the back door. How Dumb are we?
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It may be worse than that - we played up to Trump (he had a valid complaint but look how he does things). Biden may improve relations with China a bit, but we will have left ourselves alone out on a limb. Tread carefully when walking through a dog-fight...
 
We have been giving iron ore and coal away for far too long , why don't we put a 200% tariff on both , sure they will carry on for a while until their stocks get low, but the grade of our coal and iron ore is top notch and deserves more than the pittance we receive.

How about a 500% tariff on milk powder and formular. Time to play hard ball , life will go on without free trade agreements that somehow aren't in our favour.
 
The free trade deal was mistake to start with, and both sides of government gambled on it.
It turned out that China had a very good plan about how it would benefit them long before the deal was brokered, and like a girl playing hard to get, did a fine job of making us look like the amateurs we are on the world stage.
They set us up big time, and now we are in damage control stuck between the US and China.
Both of them benefitting from our loss.
I think that there has been some planning for some time though,and things are really going to get interesting in the new year.
So far its a trade war, but there has been a lot of movement by the US navy of late, and it looks like some posturing and Sabre rattling is beginning :(
 
Not sure if its same level of the 50s and 60s but its pretty serious I think. Change of govt in The US, a divided US. Lots of diplomacy. But the best way to unite a divided nation is to have a common enemy.....
 
Earlier in my career when I still lived over on the east coast where I grew up, I had a job ripping out a steel mill at the flat products plant at Pt Kembla. The Chinese had bought it and wanted every nut and bolt, now I had assigned to my work group as I was a leading hand a Chinese engineer. Now this was back in '88 and after a few weeks we taught this engineer engrish and one day he pulled me aside looking around for minders and said.

Very soon we open up China up to the west and let come in lock stock and barrel to come and rape and pillage us, then we kick them out giving them 24 hours to leave and leave everything behind.

So although this was with another leader their current leader is even more rogue
 
If it stays in the ground then it's still here ain't it.... still a thing of worth into the future.

I'd think our natural response (as will other countries be) will be to kick start our own industries once again in order to never be bitten twice. O:)
 
Probably because the Australia Day "parade" is mostly protestors. Can't say I've ever been to one, because it's nothing special in Melbourne.

Chinese New Year celebrations are better and have been happily celebrated in Melbourne for many years. Lion dances, dragon boat races, fire crackers, chinese food - it's great!

They also have big Chinese NY celebrations in Ballarat and Bendigo that dates back to the Chinese coming to the goldfields and have a long history there.

Cheers,

Megsy the Melburnian. :)
 
Yes, same here. I'd say most people have a BBQ with family and friends for Aust Day rather than go to the city for a parade. Or go to the beach if it's sunny.

Cheers,
Megsy
 
aussiefarmer said:
We have been giving iron ore and coal away for far too long , why don't we put a 200% tariff on both , sure they will carry on for a while until their stocks get low, but the grade of our coal and iron ore is top notch and deserves more than the pittance we receive.

How about a 500% tariff on milk powder and formular. Time to play hard ball , life will go on without free trade agreements that somehow aren't in our favour.
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Sure, if we want the rest of the world to put trade sanctions on us - to make us the ones seriously at fault, making China's actions look trivial. So that no country will want to trade with us - do we really want to alienate America, UK and Europe over relatively small trade issues with China (so far)? We don't live in a vacuum. And what I avoided mentioning was that we would not necessarily win in all our WTO actions re barley, wine, crayfish etc. They say we are subsidizing our exports unfairly and dumping, and we might be considered to be doing so in some cases in a judgement - it is partly a complex argument. Then we would really look good slapping on major tariffs if we were judged to have been the ones in the wrong (fortunately that is unlikely for all commodities, but the Chinese are selecting things that may make proof of us being in the right difficult in some cases). For example, they argue that when we have a drought, the natural process would be that there would be less barley so we would have to sell at a higher price. They argue that our government subsides farmers in such cases, so farmers do not need to increase their prices as much in a bad year - so that our government is actually subsidizing the cost of the barley and we are therefore dumping it on the market at less than it costs to produce.

Also, the effect of 200% subsidies on iron ore would simply make ALL our iron ore totally uneconomic to mine, as we would not be able to sell to any country (not only because they would sanction us, but because they could simply buy our iron ore and sell it on to China at a 10% mark-up). Australia would lose most or all of its trade in iron ore, China would pay a few percent more, and someone else would make a killing (these would be the options). And it would suddenly make low-grade Chinese iron ore, at present not worth them mining, highly economic - as soon as their lower grade iron ore that they don't presently mine could be mined cheaper than importing ours, they would not need ours and we would have boosted their internal economy and employment levels. Iron ore is a funny commodity in that sense - for every tonne that we can mine economically at present, there are a few tons that only need a few tens of dollars price increase to become economic, a further price increase and ten times that amount presently uneconomic in the ground becomes economic. And of course it would not just be to China's benefit, Brazil, Russia and South Africa would make a killing - even a 25% increase in price would make huge amounts of their presently uneconomic iron ore economic. Iron ore is iron ore - our government plays on our nationalist sentiment to make it sound as if we have something to offer with our minerals that others do not (it does no harm to do so usually). No, we can simply offer it at a lower price, there is plenty of it around the world - Africa is to a large degree untouched and has not even been mentioned in this discussion. In some cases the grade is even comparable and we can only offer it as a better price because we have already developed things like our rail infrastructure, and they are only slowly doing that under geographically more difficult conditions. Fortunately none of these scenarios are likely, because we would not dream of imposing 200% tariffs to no purpose.

And China has already slapped tariffs on our milk powder - New Zealand would be delighted in our actions if we made our milk powder uneconomic.

Fortunately we have economists and company directors who have a better idea of how the world works than we do.....

(softly, softly, catchee monkee - we are not dealing with fools who are giving us a hard time, but with smart people).
 
RuddyCrazy said:
Now on a more serious note there is a rumour going around the traps in the mining game China is about to stop all Aussie iron ore imports, now this country has been riding the back of the iron ore boom for a generation and with it gone at the stroke of a pen watch the cookies crumble, bank fail and worst of all a bailin to prop up the bank. A bailin is where bank account are wiped clean and taken over by the bank the account was in just so the bank boss's can still reap the huge payout before they bail this country.

This country will soon be a basket case and one of my best friends told me Indonesia is where he is headed to live before this country implodes and he said two weeks ago when he left it won't be very long until it happens
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No way in hell that will happen for a while, were are they going to get it from????. Vale just cut production and any of chinas projects are 5 years minimum away. Not many places have good clean 58% to 62% fe like us here. This is miss information imo.
 
Thanks Goldierocks i found the explanations very helpful.
Good point AF i was wondering that point of view also but turns out maybe not a good approach.
 
Gem in I said:
Thanks Goldierocks i found the explanations very helpful.
Good point AF i was wondering that point of view also but turns out maybe not a good approach.
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I don't think iron ore will be an issue from either side = we can use the money and some of it is very good grade so desirable for their existing uses. One problem with going to lower grades is it means going to slightly different mineralogies, impurities can be present etc.
 

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