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Indeed, the number of Australian's who would die within 6 months if China's supply was stopped would still be very, very low. And by this time we would have re-arranged our own production and import supply lines. When it comes to medicines China's not the only game in town. Many countries (including our own) have the capacity to produce drugs. India, for example, is another major supplier of the world's drugs.
Another point that should be made: is that playing political games with the supply of life saving medicines/equipment is considered a definite no-no on the international stage. I would be very surprised if China would stoop low enough to do this in a major way (contrary to what ttbn claims): it's something that nearly all countries wouldn't do. Even during wars that pose a real existential threat to a whole country (for example, recent and current ones involving F'ed-up backwards countries in the Middle East or Africa), combatants permit the flow of life saving medicines.