They may as well have been plucking $100 bills from the ocean floor.
As Kim Colero readily recalls, being a rock lobster fisherman in the middle of the previous decade was a licence to print money.
And the fishermen took full toll, putting almost every lobster they caught on a plane and sending it to a willing buyer overseas.
Jet skis, shiny new Land Cruisers costing $100,000, second houses in Perth’s affluent western suburbs – it was a catch that also yielded the trappings of wealth.
Such was the bonanza, a number of Western Australia’s biggest cray fishermen were propelled into the ranks of the state’s richest people, with fortunes measured in the hundreds of millions of dollars.
At the centre of it all was China.
“The industry was beginning to boom,” Mr Colero recounts.
“It was a very exciting time for the industry.
“The prices were a lot higher than what they were pre-quota.
“And they were rising.”
Boom turns to bust
The heady days of the mid-2010s are now a distant memory for Mr Colero and others in the fishery.
Overnight, the value of a trade worth more than half a billion dollars fell from the sky, dragging the wealth and the retirement plans of thousands such as Mr Colero down with it.
Worst of all, the 64-year-old saw the whole thing coming.
Just five years earlier, he had been elected to chair the board of the Western Rock Lobster Council on a platform of assessing the risks the industry faced.
That assessment found WA’s lobster fishermen were dangerously overexposed to a single market and a single product in live exports to China.
It was as concerning as it was unsurprising for Mr Colero, who said the size of the prize on offer in China meant “it was easy to get sucked into that one market – we were all-in”.
He said the industry got greedy and was now paying the price.
“We’re all businesspeople and I’m a market-based person who believes in the market economy,” he said.
“But I also understand you’ve got to have a short-term and a long-term view.
“And if something does go wrong you’ve got to have something there to back you up … because sooner or later it will go wrong.
Trade bans a ‘cautionary tale’
The ferociousness of China’s trade war against Australia — which has affected commodities including coal, beef, wine, barley, timber and cotton — has gradually faded from the public’s consciousness.
And after federal Labor’s ascension to government, hopes are growing for a reset of the relationship.
But experts caution the bitter experience of the country’s lobster fishermen should serve as a warning to all other industries still reliant on exports to the Middle Kingdom.
Among them are the wool and natural gas industries, which have reaped high prices thanks in no small part to booming demand from the world’s most populous nation.
But standing alone is iron ore – Australia’s most valuable export industry, worth a staggering $126 billion last financial year.
Jorrit Gosens, a senior lecturer at the Australian National University’s Crawford School of Public Policy, said Australia’s iron ore trade to China was “the single most important trade relationship in global steelmaking”.
Dr Gosens noted Australia’s iron ore exports to China made up almost half of all global trade in the commodity.
By comparison, he said, Australian sales of thermal coal – blacklisted in 2020 – made up just 1.5 per cent of China’s demand.
Even if China were unable to go cold turkey on Australian iron ore, he said simply reducing its reliance would still send shock waves through the local economy.
“The difference between coal and iron ore is that for coal they just said, ‘We’re not going to buy it anymore, forget it, we don’t care’, and it happened,” Dr Gosens said.
“They just have a, ‘Let’s just take the top off a little bit’.”
‘Commerce reigns until it doesn’t’
James Bowen, a policy fellow at the Perth USAsia Centre, said industries which had so far been spared Beijing’s ire could thank their importance to China’s economy.
But Mr Bowen cautioned it was a political and economic strength that could all too easily turn into a weakness.
What’s more, Australia was far more exposed to China than many of its allies, with almost a third of exports destined for the North Asian giant compared with less than 10 per cent of America’s.
“You have to go back to look at the Europe, Ukraine-Russian situation,” Mr Bowen said.
“For years and years people have been telling Germany, ‘You do not want this intense economic interdependence with Russia, it’s going to be a problem at some point in time’.
“But, you know, commercial logic reigns until it doesn’t.
“And I think in Australia it’s the same situation, basically.
Mr Bowen said the geopolitical spark most likely to blow up Australia’s economic ties to China was Taiwan, the democratic island republic that Beijing has long regarded as part of the mainland.
He said a conflict over Taiwan would cleave the world in two, with China on one side and the US and its allies – such as Australia – on the other.
Those risks were brought into sharp relief again this week when US President Joe Biden seemed to confirm that America would defend Taiwan in the event of an attack.
Ex-minister urges diplomacy
WA state MP Peter Tinley was more circumspect about the risks of China invading Taiwan, suggesting Beijing would always put its self-interest first and this was unlikely to include a major war.
In any case, the former SAS officer and Asian engagement minister said it was unclear whether Australia’s iron ore trade would be dragged into the fray, such was its importance to both countries.
More likely was a management of Beijing’s ambitions over Taiwan “that allows enough ambiguity to give China some comfort and gives the rest of the world that trades with China enough wriggle room to not hold a position”.
“If China were to actively attack Taiwan, we’ve got a bigger problem and that’s the problem between the US and China,” he said.
Mr Bowen shared those views, saying he “would like to think that it [China invading Taiwan] is implausible”.
He said the broader costs of such a crisis would be calamitous, noting China was far more enmeshed in global trade than Russia ever was.
But he said that even if tensions stopped short of boiling over, the imperative for Australia to protect its economy by diversifying its trade relationships would only become more pressing.
Weaning off China ‘incredibly difficult’
“We’re at a point in history, I think, where you can say this whole idea of commercial peace, the idea economic interdependencies would actually lead to beneficial relations between countries is just not holding up,” Mr Bowen said.
“We’ve already learnt those lessons through the last few years that we need to diversify away from China.
“It’s just proving incredibly difficult.”
To that end, Mr Tinley said business and political leaders should look to emerging countries in the region such as India, Indonesia and Vietnam.
He said Australia had a “golden opportunity” to develop new markets or strengthen existing ones before the decision was taken out of its hands.
“Emerging markets like Indonesia … three hours’ flight from Perth … we should be an expert at it,” he said.
“We should be working very hard at making sure West Australian and Australian businesses are maximising the opportunity of what will be the fourth largest economy in the globe by 2050.”
‘Exactly the same could happen again’
For retired cray fisherman Kim Colero, diversification was both essential and urgent.
He said that might mean Australia’s producers earning lower profits in the short-term.
But Mr Colero said it was better to accept lower prices on your own terms than go “cap-in-hand” to other buyers in the event of a breakdown in the relationship with your biggest trading partner.
And ultimately, he said, it was the only way to protect Australia’s economic interests in the long-term.
“I think exactly what’s happened to the rock lobster industry could happen to any of those industries,” Mr Colero said.
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