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Quite true but this prospect is Not Good for Australia. Is there any chance for Japan or the other islands/quasi-islands? If the Chinese control the West Pacific (which admittedly would be a rather big win), they control food and energy trade Japan and South Korea need. They can dictate terms of trade with us, even though we're more resource secure. They can choke East Asia to death. Japan might be capable of food security with some hardship but energy is impossible from domestic supplies. Hence the Pacific theater of WW2. If the US does get decisively beaten, what if they just switch sides? Or get crushed?
Australia has doubled down again and again on allying with the US and spurning China. Our military is pretty useless in the grand scheme of things since we're so small. Yet we show up to every single US war - Korea, Vietnam, Iraq, Afghanistan... We're buying enormously expensive US nuclear submarines for the never-never land of the 2040s. We provide all kinds of intelligence and bases and so on. We do everything a good ally should do and more. It's ridiculous that the US is so dysfunctional that they might lose to a country they were so far ahead of. The Tortoise and the Hare indeed.
And let's not forget that it was the US and Britain who sabotaged and suppressed our nuclear weapons program back in the day, with the Non-proliferation treaty. The US did the same thing to Taiwan, amusingly.
Australia also needs radical political change away from being a housing ponzi-scheme sitting on top of mining rents - yet I'm not eager to live through such a massive crisis.
I think Australians get a little hysterical about China. The Chinese have never had grand overseas territorial ambitions, certainly not as far as Australia. I don’t even think they’re particularly concerned about US/UK/allied military bases in Australia, since they have so many potential foes much, much closer.
Also, it’s very unclear that a limited military defeat in a South China Sea confrontation over Taiwan results in a full withdrawal of American forces from the Pacific. In fact, I think it’s very unlikely such a thing happens. I don’t think the US would pull nuclear weapons from South Korea, or that the Koreans would ask them to leave. I don’t think they’d withdraw from Japan either. Even though it would be a major blow to US authority and influence, these countries don’t have better options and kowtowing to China would still be worse.
The domestic blow to American identity would be more severe than the geopolitical implications.
China is about 60x more populous than Australia, they have nuclear weapons and the allies we rely on for security are all even further from us than China is. A little hysteria is not unreasonable.
Sure, a limited US defeat wouldn't be so bad. But a resounding defeat for the US, as you said, (or a rather big win for China as I said) would cause significant political changes in the US. Are we talking coups, civil war, prolonged insurrections, a decade of disaster like Russia's 1990s? I guess the big question is how decisive this war is and how resilient the US is.
Is it tenable to keep nukes in South Korea if Korea is effectively cut off from the US? The Soviets didn't manage to keep nukes in Cuba.
Furthermore, China is and should be concerned about Australia. Australia is where the iron ore is, where the coal is, where a non-trivial amount of surplus food production is.
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