Australia is watching closely as the leadership in Beijing tries to overhaul the Chinese economy from the speculative basis on which much of the growth in recent years has been based to something more grounded and in touch with the needs of the people.
As the Chinese economy transitions to more domestic orientated growth, recent strength in the Aussie dollar suggests that traders and investors global believe Premier Li and President Xi are going to be able to pull the transition off without too many hiccups.
This week the Centre for International Finance and Regulation (CIFR) released a paper titled “The Internationalisation of the Renmimbi” which had a number of great charts about Australia’s relationship with China.
But it’s these two which highlight the real impact of China on Australia since it joined the World Trade Organisation in 2001.
The CIFR report says that in “fiscal year 2012-13, Australia’s total trade with China was valued at $A 129.5 billion, or just under 24% of our total trade in goods and services. China is now Australia’s largest export market and largest source of imports: a dramatic change from just ten years ago.”
But while rocks and dirt – especially iron ore – dominate the export side of the equation at the moment, the CIFR says that “the trade composition is likely to change considerably over time – on our export side in particular – as Chinese growth is reoriented more towards domestic consumption and less towards manufactured exports”.
Looks like plenty of opportunities for Australian business in the years ahead.