I don’t think China does anything these days without Strategic motive. Particularly in the territories surrounding Australia.
Do you think any country helps another without a strategic motive?
I hope some logical and less painful outcome can emerge. I recall a shrunken Ansett operation with A320's in administration and Fox-Lew consortium seeking government guarantees.
I do wonder what a 50% cut to the VA operation would look like. Can leased aircraft be returned without too much penalty? Or simply sell the owned airframes? The idea is to reduce the cash burn rate and be ready to increase domestic capacity when demand is allowed to rise. Whether that is enough to stave off administration who knows.