Former Queensland Premier Peter Beattie's stark warning at Australia's 2025 Economic Reform Roundtable, "China is going to kill us," if the nation doesn't prioritise innovation, captures a chilling economic reality. Without urgent investment in homegrown start-ups and a tax system that incentivises risk-taking, Australia risks becoming a "second-rate economy," outpaced by China's relentless technological and industrial ascent. But Beattie's words, rooted in economic fears, may carry a darker, more literal truth for the future. As China's economic dominance grows, so does its military and geopolitical clout, posing existential risks to Australia and the West that extend far beyond dollars and cents. Today, China is economically outmanoeuvring the West; tomorrow, its strategic ambitions could threaten the very survival of nations slow to adapt.
Beattie's alarm, echoed at the Canberra summit, stems from Australia's lagging innovation ecosystem. As chairman of Brandon BioCatalyst, a $1.2 billion hub for medical research and start-ups, he argues that Australia's proposed unrealised capital gains tax on superannuation accounts over $3 million could choke investment in critical sectors like biotechnology. Family offices, which account for 40% of private market investors, may shy away from volatile start-ups, stunting growth in industries where Australia could lead. This tax, criticised by Labor luminaries like Paul Keating and industry leaders like BlueScope's Mark Vassella, threatens to exacerbate Australia's productivity crisis, already at 60-year lows, with the Reserve Bank slashing 2025 growth forecasts to 0.7%. Without reform, Beattie warns, China's innovation juggernaut will "monopolise" industries, leaving Australia, and by extension, the West, economically sidelined.
China's economic edge is undeniable. It leads in 57 of 64 critical technology fields, from AI to quantum computing, according to ASPI's Critical Technology Tracker. Its "new quality productive forces" value high-end, intelligent, and green development, outpacing Western efforts. Australia, heavily reliant on China for 40% of its exports, equivalent to 5.6% of GDP, faces acute vulnerability. The 2020 coal ban showed Australia's ability to pivot to other markets, but as China invests in alternative iron ore sources in Africa via its Belt and Road Initiative, Australia's economic leverage could erode. Europe faces similar risks: China supplies 80% of the EU's solar panels and dominates battery production, critical for the green transition. If Western nations don't innovate, they risk becoming dependent on a rival power, ceding economic sovereignty.
The West's economic malaise compounds the problem. Productivity stagnation, near zero in Australia and sluggish across the OECD, hampers growth. Layoffs, up 140% in the U.S. in 2025, and youth unemployment at 15–20% in Western Europe, trap young people in gig economies, undermining the middle class. Meanwhile, China's GDP growth, projected at 4.8% in 2025, reflects a disciplined focus on domestic demand and technological self-reliance, even amid trade wars. Beattie's call for tax incentives to reward long-term investment in innovation, like a 10–15% capital gains tax rate for decade-long commitments, aims to counter this. Without such measures, the West risks a slow economic death, unable to compete with China's scale and ambition.
Beattie's economic warning carries a shadow: China's growing power could turn lethal. While he focuses on innovation, the strategic implications of China's rise threaten Australia and the West more directly. Hugh White, in a 2025 Quarterly Essay, argues that the U.S.'s waning regional primacy leaves Australia exposed to direct military threats from China for the first time since 1945: https://www.quarterlyessay.com.au/essay/2025/06/hard-new-world. China's naval buildup, including aircraft carriers suited for long-range operations, suggests potential power projection as far as Australia. While a direct attack remains unlikely today, credible only if Australia joins a U.S.-China conflict over Taiwan, China's military modernisation raises the spectre of future aggression, if not invasion.
The Lowy Institute's 2025 poll reveals Australian anxieties: 71% see China as a future military threat, a sharp rise from a decade ago. Beijing's history of coercion, trade bans on Australian beef, wine, and barley after the 2020 COVID-19 inquiry call, shows its willingness to punish. Subtler tactics, like cyber operations and "strategic ambiguity," keep Australia on edge, as noted by ASPI. South Korea's 2017 experience, facing economic sanctions for hosting U.S. missile defences, underscores China's playbook: implicit threats to deter sovereign action. For Australia, aligned closely with the U.S. via AUKUS, the risk of becoming a target grows. China's 2021 warning that AUKUS could make Australia a "nuclear strike target" highlights this danger.
Beyond Australia, the West faces a broader existential challenge. China's nuclear arsenal, projected to exceed 1,000 warheads by 2030, narrows the U.S.'s strategic advantage. Its dual-use missiles, like the DF-26 "carrier killer," could shift from conventional to nuclear warheads, complicating deterrence. A Taiwan conflict, increasingly plausible, could draw in allies like Australia, Canada, and the UK, escalating to catastrophic levels. Meanwhile, China's economic coercion, controlling critical minerals and supply chains, could cripple Western industries in a crisis, as seen in its 2025 export controls on rare earths. The West's reliance on Chinese technology and resources amplifies this vulnerability, making "decoupling" costly and complex.
History warns of the fate awaiting societies that lose their edge. Rome's collapse wasn't just barbarian invasions but a failure of civic virtue and innovation, as citizens grew complacent. The Qing Dynasty's stagnation in the 19th century, unable to match Western technological advances, led to its humiliation and decline. Today, the West risks a similar fate if it cannot counter China's dual economic and military rise. Beattie's plea for innovation isn't just about jobs, it's about survival. A civilisation that fails to foster resilience, whether through economic dynamism or strategic preparedness, invites its own demise.
China's strategic patience contrasts with Western shortsightedness. While Australia debates tax policies and Europe grapples with energy transitions, China invests in long-term dominance, AI, green tech, and military modernisation. Its Belt and Road Initiative secures global influence, while the West's fragmented response, U.S. tariffs, EU carbon borders, lacks cohesion. If the West continues to choose short-term comfort over bold reform, China's economic strangulation could precede a more literal threat, as its ability to project power grows unchecked.
Beattie's warning is a clarion call: innovate or face economic irrelevance, with strategic peril to follow. Australia must lead by example, reforming tax systems to reward long-term investment, as Beattie suggests, and leveraging institutions like the Future Fund to back start-ups without "picking winners." The West must follow suit, reducing reliance on Chinese supply chains, fostering technological independence, and rebuilding industrial capacity. Policies like Germany's dual education system, which cuts youth unemployment, or Canada's trade apprenticeships, could restore economic vitality. Militarily, alliances like AUKUS must balance deterrence with diplomacy to avoid provoking China unnecessarily.
The alternative is grim. Economically, China is already "killing" the West by outpacing its innovation and capturing markets. Literally, the future could see Western nations, Australia most exposed, facing military coercion or worse if they remain tethered to a declining U.S.-led order. The West must heed Beattie's SOS, forging a path that blends economic boldness with strategic foresight. History is unforgiving: civilisations that fail to adapt don't just fade … they fall …with a thump!