Strategy Soup
Report 011 · Rock and a Hard Place: Australia in a Taiwan Crisis
An exercised scenario: one question run as a simulation, then reported with the record attached. It is not a forecast.
In this simulation, from 1 April 2027 China puts military pressure on Taiwan with exercises and coast guard patrols. It can go on to a or a . Australia sends almost 30 per cent of its exports to China and imports most of its fuel by sea.
Nine players act over ten turns, from a week to six months long, to December 2028. Each Australian choice can send a to another area a turn or more later.
Why it matters. In March 2026 the war in the Middle East cut shipping through the Strait of Hormuz, and many Australian service stations ran out of fuel. A crisis near Taiwan would test the same fuel supply, the same trade and the same alliance at once.
At the start
The simulation counts each side's military strength as a level from 0 to 5, not as ships, aircraft or troops. These are the levels it starts from, and the bases the public record names.
The rules
Turn 1 of 10 · 1 to 7 April 2027
If Australia gave nothing within two turns, the US would mark its down. The Prime Minister underwrote fuel cargoes, and China readied forces for a quarantine, hidden from the other players.
Turn 2 of 10 · 8 to 14 April 2027
The Prime Minister approved wider US use of the bases at Tindal and Darwin without announcing it, with a chance that it leaks. Defence raised readiness and Foreign Affairs and Trade agreed a minerals deal, which took the government’s from 3 to 1 of 5.
Turn 3 of 10 · 15 to 28 April 2027
The leak cost a point of the , which Foreign Affairs and Trade won back in the same turn. Because Australia had approved the access, the US bill for an unanswered ask lapsed.
Turn 4 of 10 · 29 April to 29 May 2027
China offered to ease trade if Australia took no side over Taiwan, though its forces were ready for a quarantine. Defence raised readiness again and used the last budget unit.
Turn 7 of 10 · 30 August to 28 November 2027
In turn 5 China had offered Taiwan talks on its own terms. Taiwan logged that accepting would point toward subordination, and appealed to its partners.
Turn 10 of 10 · 30 June to 30 December 2028
The port is leased to a Chinese company, Landbridge. Australia returned it to Australian control in turn 9. In turn 10, on a chance, Chinese measures cut China trade from 10 to 9 of 10.
The end · December 2028
No quarantine or blockade came. Australia ended with alliance credit of 5 of 5, nine tenths of its China trade and about 45 days of fuel.
How it ended
1
We changed one move at a time in this world. From each change, we played the rest of the crisis 300 times with . None of the 260 changes to Australian moves shifted to another ending. 26% of the 278 changes by China, the US and Taiwan did, 73 in all. China’s logged reason in turn 4: Australia staying out is worth more than any punishment.
2
In the 7,200 , when Australia announced wider US access, China protested a turn later in 99 of every 100 of those replays. When Australia underwrote fuel cargoes, the budget paid again in 97 of every 100. When Australia returned the Port of Darwin, Chinese trade measures followed in 75 of every 100. The Prime Minister’s logged reason in turn 9 expected that bill.
3
Half the replays started with about 25 days of fuel and half with about 35, and the endings came out almost the same. Fuel cover fell below 25 days, where service stations ran dry in 2026, in 63 of every 100 replays with the thin start, against 35 with the rebuilt one.
4
In this world we changed the Prime Minister’s answer in turn 2. Australia in 83 of every 100 after the unannounced approval, 86 after an announced one and 62 after a refusal. After a refusal, it kept its China trade but lost its alliance credit in 31 of every 100. Across the replays, an announced approval cost Australia its China trade in 12 of every 100, against 4.
5
Of the 260 changes to Australian moves, 33 shifted by 10 or more. 17 cost China trade more often, mostly joining a condemnation of China or saying in public what role Australia’s forces could play. 14 cost alliance credit more often, by refusing the US request or by not approving US access in turn 2. Across the replays, Australia lost its alliance credit in 17 of every 100 and its China trade in 8. With alliance credit one unit lower at the start, it kept both in 68 of every 100 control replays, against 76. Budget units and the fuel stock at the start barely moved that.
Endings
Each count is out of 300 from the turn where the paths split. A, B and C are how the crisis ended. D is what Australia kept.
Ending A · The ending this world reached
This world reached it, and so did 203 of 300 re-runs from its first turn.
Who comes out ahead. No player gains much. Australia keeps both.
What has to happen. China declares no quarantine, and Taiwan does not take up China’s offer of talks.
Ending B
275 of 300 re-runs, if Taiwan accepts the talks in turn 7. As played, 37.
Who comes out ahead. Taiwan and China. Australia keeps both in 292 of 300 either way.
What has to happen. Taiwan accepts talks it had called a step toward subordination.
Ending C
76 of 300 re-runs, if China declares a quarantine in turn 4. As played, none.
Who comes out ahead. No player. Fuel cover falls below 10 days in 185 of 300, and exports fall to 60 per cent of normal or less in 146.
What has to happen. China uses the quarantine it readied, with a chance that it takes hold.
Ending D
147 of 300 re-runs end with alliance credit but without the China trade, if Foreign Affairs and Trade joins a joint condemnation of China in turn 6. As played, 8. How the crisis ends barely moves.
Who comes out ahead. The US, a little. China’s state buyer halts purchases of an Australian product line in 177 of 300 re-runs, against 86, which lowers the ceiling on Australia’s access to China’s market for good.
What has to happen. Australia joins the US and Japan in condemning China, and China takes trade measures against Australia.
The main take-away
This scenario suggests that Australia can keep both its alliance credit in Washington and its China trade through a Taiwan crisis: it kept both in 75 of every 100 of the 7,200 replays. But its own choices barely changed how the crisis ended. None of 260 changed Australian moves shifted 10% or more of the re-runs to another ending. What Australia’s choices did decide was which delayed bills came due: costs that land in another area a turn or more after a move. In this world the unannounced approval of wider US access leaked a turn later, and public support fell from 55 to 49. The government had used all its budget units by May 2027, and the minerals deal they paid for never landed. Returning the Port of Darwin to Australian control cost a tenth of the China trade a turn later. The replays show the same pattern: announcing US access drew Chinese protests in 99 of every 100 replays that did it, and returning Darwin drew Chinese measures in 75. Of the four holdings, alliance credit was lost most often, and China trade was put at risk by the most Australian choices (outcome 5). Our judgement, beyond what the simulation tested: decide in advance which of budget, fuel, alliance credit and China trade Australia will spend first.
Status as at 17 October 2026.