By Levi Parsons For Daily Mail Australia

Published: 11:53 EDT, 15 April 2022 | Updated: 11:54 EDT, 15 April 2022

The near total destruction of Australia's manufacturing sector has left the country open to 'coercion and economic blackmail' by China, outspoken Communist Party critic Clive Hamilton has warned.

The public ethics professor at Charles Sturt University told Daily Mail Australia both sides of politics need a bipartisan commitment to rebuilding the nation's manufacturing capability before it's too late.

At its peak in the 1960s, manufacturing accounted for about 25 per cent of GDP, with everything from cars to clothing and kitchen appliances rolling off factory production lines across the country.

But Australia's relatively high wages left local manufacturing unable to compete on price with cheaper, mainly Chinese-made imports.

Now, manufacturing makes up just five per cent of Australia's GDP, and left the country heavily reliant on an uninterrupted flow of foreign-made goods.

About one in five goods in Australia are sourced from China. Pictured: A Chinese worker at the Foxconn factory in Guangdong

Local manufacturing declined from it's peak of 25 per cent of GDP in the 1960s to only five per cent today

The supply chain problems that emerged during Covid gave a taste of how vulnerable Australia is now to any restriction on imports; something China would be very aware of and could exploit for political ends.

'Australia has become much too dependent on China for our imports and exports,' Prof. Hamilton said.

'Beijing has weaponised trade to extract political concessions. So far, Australia has stood firm in the face of this economic blackmail, but that might change. 

While the influx of cheap foreign goods has been a boon for Australian consumers, it may leave the nation strategically exposed as global tensions rise in the wake of the Covid crisis, Russia's invasion of Ukraine and Xi Jinping's growing hostility in the Indo-Pacific region.

'Australia needs to learn how to make stuff again. We have lost the skills and the know-how. As the world becomes more reliant on sophisticated technologies, Australia will become more vulnerable to blackmail and coercion.'

Beyond the security considerations, the decline of manufacturing has created an imbalanced job market.

Where once factory jobs provided reliable full-time employment for those who were not suited to white-collar careers, those opportunities have now largely evaporated. 

While Australia's high-wage model makes the restoration of a manufacturing sector difficult, some comparable countries have managed to maintain those industries, such as the car makers of Japan, Korea and Germany. 

Australia's manufacturing sector began to decline in the 1970s as local businesses found it increasingly difficult to compete on price with off-shore production houses emerging in Asia.

By the year 1980, local manufacturing dropped to 19 per cent of GDP, with tens of thousands of jobs vanishing over the decade.

A manufacturing worker is seen assembling a Holden car at the company's Elizabeth plant in South Australia in 2008, before the brand sent its production line overseas

The graphic shows how the importation of Chinese goods has accelerated over the decades

At the same time Australia's manufacturing sector declined, reliance on Beijing rapidly increased with 18 per cent of all goods now shipped from China. Pictured: Sydney waiter

The removal of trade tariffs coupled with the decision by Prime Minister Bob Hawke and Treasurer Paul Keating to modernise the economy and float the dollar in 1983, added further pressure on the sector - but also enabled Australians to have far greater spending power.

Despite the slowdown on domestic production many businesses continued to thrive Down Under including carmaker Holden, kitchen appliance firm Sunbeam and clothing giant Bonds.

But all of these iconic brands eventually sent their production lines overseas after the turn of the century.

At the same time Australia's manufacturing sector declined, reliance on Beijing rapidly increased with 18 per cent of all goods now shipped from China, according to Department of Foreign Affairs and Trade data.

Australian workers are seen manufacturing textiles in Victoria during the height of the industry

Factory workers in Victoria are captured making goods before the industry declined 

'We need a bi-partisan agreement to rapidly build our manufacturing capability and the skills that go with it, particularly in the new hi-tech sectors of the 21st century, like nanomaterials, AI, genetics and robotics,' Prof Hamilton said.

'Beijing decided a decade ago that it was going to become the hi-tech powerhouse of the world and it is well on the way to achieving that goal, partly by a massive program of tech theft.

'This is dangerous because China is becoming the dominant player in the tech industries of the 21st century. 

'It will extract a high price from other nations once it holds all the hi-tech cards.'

The comments below have not been moderated.

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

We are no longer accepting comments on this article.

Published by Associated Newspapers Ltd

Part of the Daily Mail, The Mail on Sunday & Metro Media Group