This article was originally published in NT News on or about 16 November 2025 and was written by the author in their capacity as a contributor for that publication.
It has been republished on the IPA website with permission. The views expressed are those of the author alone.
Australia has become so reliant on trade with China that some argue we should not even talk about the possibility of it ending.
This kind of “end of history” argument, applied to global free trade in 2025, misses much that has happened in the world since 2019.
China’s rising share of minerals processing and manufacturing capability is not purely the result of benign free trade based on the comparative advantage of economic theory, but reflects the kind of deliberate statecraft of an Otto von Bismarck.
Under German industrial policy set up under Bismarck, manufacturing capabilities were ruthlessly increased to benefit the German people, regardless of the costs imposed on other states.
Germany’s industrial processing was eagerly fed by the laissez-faire trade policies of the British Empire.
Between 1887 and 1913, Australian exports to Germany increased from 1 per cent to 10 per cent.
That made Germany Australia’s largest export destination outside of Britain on the eve of WWI.
But this was an underestimate, acknowledged at the time, because it was “exclusive of those commodities which, though shipped direct to London and other British ports, are purchased by German firms trading in England”.
In hindsight, the deliberate nature of Germany’s plan is plain to see.
In February 1910, The Age reported the “growth of the chemical industries in Germany, in many of which she has gained a virtual monopoly”.
“Yet Germany is dependent upon foreign countries for the raw material of these industries.” Two years later, in June 1912, the same newspaper highlighted Germany “takes fully one-fourth of the primary produce won by us from the land”.
According to the University of Melbourne’s Peter Yule, before the war Australia “was a major producer of lead, zinc, and copper, but almost its entire output was sold to a German cartel which dominated world trade in base metals and also controlled much of the world’s metal processing capability”.
It was a common joke before the war that German trade throughout the British Empire had advanced with such a rapid pace Germany would ultimately “possess the Empire by peaceful penetration”.
Which brings us to our parallel. A recent editorial in The Australian newspaper pointed out “China has monopolised the (rare earths) market because it has used government policies to make it uneconomical for others to compete … the rare earths issue is a measure of how the world has been asleep at the wheel on what the outsourcing of manufacturing and supply of critical minerals to an authoritarian state actually means”.
One might also point to China’s Landbridge leasing of the Port of Darwin for 99 years in 2015 as another example of this kind of economic statecraft, given the strategic importance of the port and the massive accumulated losses the company has run up in holding it.
In the 1890s, Australia was not yet a country. A set of colonial outposts which could be forgiven for not having the political independence or will to resist the statecraft of one of the greatest strategists of the 19th century.
In 2025, we don’t have the same excuse.
