You are spot on with regards to asian culture around "keeping/losing face".
It is all about optics. If Australia beg/grovel then China will see this as a win and won't impose tarifs. If Australia dig in then China will almost always follow through because they don't like to be embarassed or look like they've lost.
I'm relatively confident China has been posturing to get Australia back into line.
TWE Price at posting:
$8.00 Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)