Using international trade data compiled by the United Nations, the report found that Australia depends on China for 595 different goods ranging from ballpoint pens to pharmaceuticals to garlic. New Zealand was second-most dependent on China (for 513 different goods) followed by the United States (414), Canada (367) and the United Kingdom (229).
However, the survey homed in on the nations’ dependence on China for strategic goods. To qualify as strategic, an item had to be critical to a sector’s operation, rendering operations unviable or incapable of expansion if it were to be withdrawn.
On this measure, Australia remained the most dependent on China, with 27.6 per cent of total imports – 167 items – deemed critical.
The study laid bare Australia’s dependence on China for health supplies with 89 per cent of anthraquinone (an ingredient in anti-malarials and cancer drugs), 85 per cent of first-aid kits, 84 per cent of salicylic acid, 73 per cent of spectacles and protective goggles, 72 per cent of steel sanitary, 69 per cent of penicillin and its precursors and 61 per cent of azelaic acid (used to treat skin conditions) all imported from China.
The analysis found that 94 per cent of laptops and three-quarters of Australia’s smartphones come from China.
US Senator Marco Rubio said in a contribution to the report that the “strategic dependence” exposed by the report was “one of the greatest perils facing each of our five nations”.
“As the ongoing COVID-19 pandemic makes clear, it renders each of our countries vulnerable to deadly new challenges in public health,” the Republican senator said.
“Chinese capture of supply chains that produce equipment like face-masks and respirators has directly resulted in lives lost across all our countries. And with Beijing’s growing dominance over technological infrastructure, it even threatens to erode the sense of security that enables our countries’ close ties.”
On Thursday night, US President Donald Trump told Fox News he was disillusioned with the trade deal he signed with China in January and might walk away from it.
“We could cut off the whole relationship,” he said, estimating such a drastic move would “save $US500 billion ($774 billion)”.
The report did not recommend an immediate economic decoupling from China as that would be “painful and expensive” but said the Five Eyes countries should work together to prevent China dominating the nine industries that it identified would dominate the future economy.
They are: artificial intelligence and machine learning, autonomous robotics, computing hardware, cryptographic technology, materials and manufacturing science, nano-technologies, networking and data communication, quantum technology and synthetic biology.
David McCredie, CEO of the Australian British Chamber of Commerce said the crisis had shown the need to take stock of the risks posted by singular supply chains.
“Diversification of trading partners, like diversification in investments is an important risk mitigation strategy,” he said.
“Australia and the UK, along with our five eyes partners have great opportunities to build greater confidence and capability in the industries of the future. The imminent Free Trade Agreement will focus on the opportunities in these sectors and are already reflected in the policy frameworks of both countries.”
Latika Bourke is a journalist for The Sydney Morning Herald and The Age, based in London.