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Recent revelations that Chinese-made solar inverters and other technologies were compromised by “rogue” communication devices underscore the People’s Republic of China’s latest move in “grey zone” warfare. For Australia, however, the threat goes beyond “compromised” energy infrastructure.
Since the 1990s, Australia has undergone a profound economic transformation, reshaping its identity from a manufacturing hub to a modern, service-oriented economy.
This shift has been marked by the steady de-industrialisation, where the nation has steadily moved away from its traditional manufacturing base, which, according to the Australian Bureau of Statistics, once made up approximately 25–30 per cent of the national economy.
Once a cornerstone of jobs and production, manufacturing has declined due to global competition, technological changes and evolving economic priorities. In its place, new sectors and markets have risen to define Australia’s economic landscape.
A pivotal element of this change has been the rise of China as a dominant export market. China’s rapid economic growth since the 1990s has created an insatiable demand for Australia’s raw materials, particularly iron ore and coal. This relationship has fuelled a resources boom, making China the linchpin and single most important partner for Australia’s export economy.
Billions of dollars in trade have flowed from this partnership, fundamentally altering the direction of Australia’s economic fortunes and tying its prosperity to the fortunes of its northern neighbour.
Alongside this, Australia has seen a significant shift towards services, real estate speculation and tourism as key drivers of wealth.
The services sector – spanning finance, education and healthcare – now marking 80 per cent of the national economy has expanded rapidly, reflecting global trends towards knowledge-based economies. Meanwhile, real estate has become a national obsession, with soaring property prices in cities like Sydney and Melbourne turning housing into a speculative goldmine for investors.
Tourism, too, has flourished, drawing millions of visitors to Australia’s natural wonders and urban centres, injecting vital revenue into the economy.
This economic evolution has been propelled by a mix of globalisation, technological advancements and domestic policy decisions. Open trade policies and digital innovation have accelerated the decline of old industries while fostering growth into new ones.
However, this transformation isn’t without risks. Australia’s heavy reliance on China leaves it vulnerable to shifts in that market, while the property boom raises concerns about affordability and potential bubbles.
As Australia navigates this changing landscape, the need for strategic planning and diversification looms large, while the shift since the 1990s has brought prosperity, it has also exposed fragilities that demand attention.
This has only become more prominent as external shocks, such as the COVID-19 pandemic of recent years, served to highlight the vulnerability of Australia’s national economy to global, “just in time” supply chains and the weaponisation of trade and economics by our primary trading partner for requests for transparency over the origins of the pandemic.
Highlighting this is recent revelations that Chinese-made solar inverters, batteries and other related technologies have been “compromised” by “rogue” communications technologies, raising questions about just how pervasive the threat is among everyday items that we use.
But how does this relate to the concept of a comorbidity in the Australian context? Well, a comorbidity, in its most simple terms, is defined as a “a disease or medical condition that is simultaneously present with another or others in a patient” and can be used as the perfect descriptor for the myriad of economic, industrial, political and strategic challenges facing the nation.
When recognising this and accounting for the backdrop of Beijing’s mounting “grey zone” warfare across the Indo-Pacific, we come to realise that just maybe, we have been sowing the seeds of our own destruction and all the cheap TVs, solar panels and Kmart or Ikea nick-nacks in the world isn’t worth our own prosperity, sovereignty and at the social level, dignity and self-reliance.
We were smart enough before
In many ways, Australia was a world leader in anticipating the exposure of critical infrastructure to Beijing’s espionage efforts, when in August 2018, the then-Turnbull government, acting on classified advice from the Australian Signals Directorate, formally barred Huawei (and fellow Chinese vendor ZTE) from participating in Australia’s 5G rollout, citing unmitigable national security risks and potential for foreign‑state interference under China’s National Intelligence Law.
This marked the first time any country had outright banned Huawei from next‑generation mobile infrastructure, signalling a shift towards “security first” procurement in critical infrastructure networks. Australia’s stance reverberated across its Five Eyes partners and beyond.
The United States reinforced export controls and procurement rules to exclude “high‑risk” vendors, while the United Kingdom and Canada followed with similar exclusions or phased‑own bans on Huawei equipment. Meanwhile, within the European Union, nations such as Sweden (October 2020), the Netherlands (2019), and Portugal (May 2023) imposed targeted restrictions or outright bans on non‑EU suppliers deemed security threats – effectively closing markets to Huawei.
Collectively, these measures established a durable precedent: deep‑tech supply chains for 5G would be governed by allied intelligence‑sharing norms rather than purely commercial considerations, yet we seem to have completely overlooked the vulnerability of other critical infrastructure and components of critical infrastructure.
As previously mentioned, coming into the crosshairs is recent revelations that Chinese-made solar inverters, batteries and other related technologies have been “compromised” by surveillance equipment. Highlighting this is Mike Rogers, a former director of the US National Security Agency. Speaking to Reuters, he said, “We know that China believes there is value in placing at least some elements of our core infrastructure at risk of destruction or disruption. I think that the Chinese are, in part, hoping that the widespread use of inverters limits the options that the West has to deal with the security issue.”
Despite the efforts of the Australian government’s “Future Made in Australia” and the seemingly ridiculous efforts to locally manufacture solar panels – competing directly against the industrial might of Beijing which has global dominance of the solar market – while also accelerating the rollout of renewables across Australia’s energy grid, this vulnerability and exposure to potential compromise doesn’t stop there.
The proliferation of “smart technology” in our daily lives – from our mobile phones and smart TVs, through to the increasing numbers of Chinese-manufactured electric and combustion vehicles with integrated “smart systems” – expose the length and breadth of the Australian economy and everyday lives to potential risk and coercion at an unprecedented level.
All of this comes well before we even account for the social aspect of Beijing’s influence operations through social media (TikTok), universities (Confucius Institutes) and a host of other active and passive efforts to influence Australians and other populations.
Echoing the message of Rogers is US Representative August Pfluger, a Republican member of the committee on homeland security, who also detailed the current recognition of the US government to Reuters, “The threat we face from the Chinese Communist Party (CCP) is real and growing. Whether it’s telecom hacks or remotely accessing solar and battery inverters, the CCP stops at nothing to target our sensitive infrastructure and components.”
To deliver this, two US senators introduced the Decoupling from Foreign Adversarial Battery Dependence Act, which prohibits the Department of Homeland Security from purchasing batteries from certain Chinese entities starting in October 2027, citing national security concerns.
And here in lies the opportunity for Australia and the broader Western world to “break” or “decouple” from China in a mutually beneficial way to prevent any unnecessary provocation through active programs of reshoring and, in Australia’s case, active reindustrialisation through the promotion of competitive and dynamic industrial base.
Final thoughts
Australia’s path to reindustrialisation is fraught with complex challenges, ranging from high energy costs and an eroded manufacturing base to growing geopolitical tensions and economic coercion, particularly from China.
The shifting global order has exposed the vulnerabilities of over-reliance on fragile, offshore, “just in time” supply chains and underscored the need for greater sovereign capability in critical sectors such as energy, technology and defence.
In this environment, reindustrialisation is not only an economic and social imperative but a strategic one and is a near terminal comorbidity Australia needs to overcome.
To succeed, Australia must invest in advanced manufacturing, critical minerals processing and clean energy technologies while cultivating a skilled workforce and fostering innovation.
Just as crucial is deepening collaboration with like-minded democracies such as the United States, Japan, the EU, and key Indo-Pacific partners – to build trusted supply chains and shared standards for economic resilience and technological security. By aligning with allies and diversifying trade and investment partnerships, Australia can mitigate foreign interference risks while capitalising on new markets.
Reindustrialisation presents a rare opportunity: to strengthen national security, enhance economic sovereignty and opportunity, and shape a more resilient and future-ready nation.
The decisions made now will determine whether Australia remains a passive actor in global shifts or a confident, capable contributor to a stable and secure international order.
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
