7.9pc Growth In China Is Likely To Be The Savior Of Austrlias Economy? Why?
Posted by China Sourcing CommentatorOct 30
I asked this question before, but i didnt quite understand the answers… if possible could you explain a little more? thankyou.
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China is Australia’s second biggest trading partner (after Japan) with a two-way trade valued at US$ 56 billion in 2008. China is also Australia’s biggest source of foreign investment. With China being less affected by the global recession, it will contribute to Australia’s income resulting from exports, in particular coal, iron ore, gold and other commodities.
China buys a lot of natural resources and commodities that Australia sells. And as long as China keeps buying, a big part of Australia’s economy will keep doing well.
But the thing about China’s growth is that it has been artificially created by the Chinese government through massive lending by Chinese banks. A lot of people in China are hoarding commodities and speculating in them. And this kind of economic growth can’t continue for long.