Let’s follow this to its logical conclusion, from China back to Australia. So China, like everyone else, faces the “Tragedy of the Commons”. For a city to build a desalination plant to cope with water shortage, or an individual to install air conditioning to cope with air pollution, benefits the individual but disadvantages the whole community and ecosystem by actually increasing the problem of environmental degradation. Diverting water (like the massive South (Yangtze)-North water diversion scheme- see Guardian Weekly Review 29-05-09) similarly benefits one area at the expense of a much greater ecosystem.
The Tragedy of the Commons particularly disadvantages the poor, not only by taxing them further but even to the extent of literally killing them earlier. The disempowered poor have very few options; poverty does not make good media; their jobs may well be in the polluting industries and their four “ways out” are striking it rich somehow, accepting their lot or campaigning for better conditions, either peacefully ( the Ghandi or Greenpeace option) or forcibly (the Taliban option).
There are three parties who can break this vicious cycle- governments, corporations and empowered individuals (the wealthy). Governments act by investment, regulation, incentives and penalties and some, like China, are steadily doing so, with enormous courage. Corporations and wealthy individuals then must play their part. So if capable individuals in wealthy Australia, like Clive Palmer, used their resources and evident abilities to fund clean renewable energy rather than coal, they would be contributing to solving the problem instead of actually furthering the vicious cycle created by mining more dirty fuels. Every hour and dollar they spend on coal is an hour and dollar that is not spent on the clean-energy future. If they were working on clean energy, regional Queensland could be acquiring jobs that realistically have good long term future prospects and Australia might be making its fortune by pioneering the technology of the future.
So it is comes back to us to take the initiative. Sitting back and waiting for China to “recover” is the least sensible, progressive, or responsible option for Australia.

Riccardo wrote;
And it is one resource that even the richest country cannot buy, beg, borrow or steal from someone else.
unquote

But that is exactly what China is doing. Their water diversion works
in the Himalayas will divert water from the Ganges in India.
If this does not a cause of war then we will be very lucky.

I really don't have an answer to all the problems China is posing and
I suspect that no one including the Chinese do either.