For all the talk of digital disruption, who would have thought the old fashioned steel industry would be the industry causing the greatest upheaval in today’s economy?
Beyond the immediate domestic problems of having a major part of its manufacturing industry shut down, Australia faces an added problem as the nation’s economic policies were based on a never ending Chinese demand for iron ore and coal.
The impending collapse of Bohai steel shows the Chinese industrial boom is now in the past and the onus on Beijing’s rulers is to stimulate a domestic services economy.
For the UK, the collapse of their steel industry adds further uncertainty to a nation that’s already putting its global role at stake with the referendum to move out of the European Union.
Should Britain turn away from Europe, they will need to find some compelling reasons to be competitive in the global economy. Fantasies of some sort of Anglo-centric Commonwealth of Nations won’t be enough to sustain the Little Englanders and their high cost of living.
In fact, the British problems of high costs and decades of underinvestment are common across the English speaking world – although Canada, New Zealand and Australia are particularly at risk in the current economic climate given their dependency on commodities and Chinese markets.
That Chinese curse of may you live in interesting times is proving true again, we are about to enter a fascinating economic period. Our business and political leaders, along with our resilience, are about to be tested. The steel industry is the first test.