Think tank warns China’s industrial subsidies threaten 73,000 Australian smelting jobs

China's industrial subsidisation spending now exceeds its defence budget and threatens to devastate Australia's smelting and refining regions unless urgent government intervention occurs, according to a McKell Institute report released on Wednesday.

The think tank warned that 73,000 jobs across regional Australia are at risk from Beijing's “geoeconomic interference”, with some towns potentially losing up to 11 per cent of their population if key facilities close.

McKell Institute chief executive Ed Cavanough said China's strategy aims to onshore global heavy industrial capacity whilst limiting manufacturing viability in competitor economies. “Currently, the government is playing industrial whack-a-mole – working with individual refiners to preserve individual plants as they come under threat,” Cavanough said.

The report highlighted South Australia's vulnerability, warning Port Pirie could lose around 2,000 residents – its most economically productive families – in the first year following a smelter closure.

The institute recommended the federal government acquire equity stakes in supported businesses, review anti-dumping frameworks, strengthen domestic procurement requirements, and mandate that a proportion of raw materials extracted in Australia must be refined domestically.

Cavanough said the approach represented a shift from reactive responses to structural action. “If the Commonwealth government is serious about preserving Australia's capacity to manufacture metals – as it should be – then we need decisive structural action now,” he said.

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