Australian coal has today been handed an unfortunate lesson by China that the rest of the business community should heed. We shouldn’t be surprised if something similar happens in the future.
The global business environment is being increasingly disrupted by international political developments. Will the Australian business community be ready?
Despite the Australian Government’s intent to downplay the issue, alarm bells will most assuredly be ringing loudly in Canberra. The restriction of coal into a northern Chinese port is a significant development in Australia’s relationship with Beijing. We’re not in Kansas anymore.
At the moment, there is a lot of speculation and noise as to what motivated the decision and what it might mean. The picture will become clearer in the medium to longer term.
It is important to look through a wider lens too. There is certain turbulence coming to the global business environment. There are two big, and more concerning, issues at play.
First. Britain will be leaving the EU on March 29. It is looking like a “hard” Brexit. Nobody knows what the result will be. Uncertainty is bad news in international politics just as it is in the business world. Second, the US and China are engaged in a trade dispute that is complicated by their growing geopolitical competition. This shows little sign of abating.
International politics is played hard. Especially among great powers. China is the number two dog on the block. It wants to be number one. It is very plausible that the coal restriction is a retaliatory swat by Beijing in response to Australia’s ban on Huawei 5G. Australia is caught up in great power politics.
Sound business strategy demands more attention be paid to what is happening in the wider world. Like it or not, the present geo-strategic environment will continue to influence global economics. Indeed, the two will feed off each other. This inevitably will trickle down to Australian business.