Australia and china economic relationship definition

Australia-China relationship

australia and china economic relationship definition

Australian Studies Centres in China. For further information on Australia-China relations please refer to the. Department of Foreign Affairs and Trade website. Australia's economic relationship with China is crucial. has been a defining feature of our strong economic performance in recent decades;. Monthly value of Australian merchandise exports to China (A$ millions) since Monthly value of Chinese merchandise.

Greater economic weight will bring greater strategic weight. Whatever the truth of that perception, with greater prestige and influence comes greater responsibility and an expectation that China will contribute to the provision of global public goods — and provide global economic leadership.

The stability and further development of the world economy can only be a net positive for China.

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China is a key member of the G20 and it has had its representation on the IMF and World Bank increased to more closely align with its economic weight. China will need to work constructively to help address major global challenges, including rebalancing global growth, addressing climate change, finding a way forward for global trade liberalisation and supporting efforts in Europe to address the sovereign debt crisis.

By virtue of its sheer size, no major global public policy issue will be capable of resolution without China. But if China is not seen as engaging constructively on these issues, its interests will ultimately suffer. Of course, while China looms large in absolute terms, it is still at a relatively early stage of development.

And even bywhen it is expected to become the largest economy in purchasing power parity terms 1per capita GDP will still only be less than one quarter of that of the US.

China faces a daunting and complex domestic reform agenda as it shifts towards a more consumption oriented economy. As it confronts issues like financial market reform and climate change policy, China is at a stage of development where whole of economy reforms are more economically desirable and necessary, rather than isolated pilot-style reforms which have been used in the past.

UN data projects that the share of people of working age in the total population will start to fall from While China will continue to benefit from freeing up relatively inefficient agricultural labour, there will no longer be an impetus to growth deriving purely from an expanding labour force. Beyond this re-orientation of the existing workforce, China will need to increasingly rely on productivity to drive growth.

Promoting technology innovation, industry upgrading and competitiveness will help. Importantly, this requires better resource allocation — and ultimately a more market-driven exchange rate. That aside, it is worth noting that many of the challenges that China faces are also being grappled with by policymakers elsewhere, including in Australia.

We are also anticipating the consequences of an ageing society and we also face the need to improve our innovative capacity and productivity performance. So there is a common dimension to many of the challenges and it serves everyone to have an open debate, in forums such as this, about the challenges we face, and also the opportunities.

australia and china economic relationship definition

Opportunities In a relationship growing as fast as the Australia-China relationship there are of course a wealth of opportunities. The complementarity of our interests, particularly in resources, has long underpinned the relationship, but trade in services has become increasingly important and shows great potential — particularly given the growing middle class in China.

China is our largest source of foreign students, making up nearly 30 per cent of all international enrolments as at August this year, and tourism from China has grown steadily. But other services such as financial and professional services and mining services have considerable potential for increased cooperation.

There is also a great deal of potential in our bilateral investment relationship. But while Chinese investment in Australia has increased considerably, it is starting from a low base.

Australia–China relations - Wikipedia

At the end ofChina had become our 12th largest investor. And investment is a two-way street. World-class Australian companies also want to invest in China and would like to see greater opportunities opened up to them. Of course, Australia is not alone in seeking to increase and broaden its bilateral ties with China — the rest of the world is doing the same.

The Shanghai World Expo in was the largest ever held, demonstrating the worldwide interest in China. This means Australia cannot take the relationship for granted — we need to continue to work to strengthen and expand our ties. While capitalising on our complementary trade and investment relationship and our position in the Asia-Pacific region, Australia must also boost our engagement in other areas — including further strengthening our people-to-people links and improving our understanding of the Chinese language and Chinese history.

The transformation of the global economy currently underway will help define the coming century. Australia has the expertise to help to develop these. Already, China is the biggest market for Australian education services. Australia's financial sector is well regarded internationally for its efficiency and effectiveness, and its banks are among the most sound and stable in the world.

Australia–China relations

This expertise in government and services can be exported. Indeed, Australian banks are already operating in China and Australian experts have advised in a range of areas, for example, in urban development and health financing.

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China as a competitor The development of manufacturing in Asia has been a major reason for Australia's failure to compete in many areas of manufacturing. As China moves up the value chain, more industries will be subjected to this competition.

This may be ameliorated by a shift in the focus of the Chinese economy away from exporting to domestic consumption. Australia has niches where it can compete with the best in the world. It will be important to retain what lead it has in education and in the sophistication of the workforce. China as an investor Australia relies heavily on foreign investment. On the other hand, there is evidence that Chinese businesses are keen to invest in Australia, particularly in infrastructure projects.

Australian businesses have benefited from low interest rates worldwide which have been driven by the large amount of Chinese savings available for lending, both directly to Australia, but also internationally. As these are reduced, interest rates will rise, putting downward pressure on the profits of Australian businesses, revenue and growth. China as a destination for investment While Chinese savings will probably remain high enough to fund domestic expansion, there will be room for Australian companies to invest in China.

This would be a useful way for business to learn about Chinese tastes and preferences, as well as business culture.

australia and china economic relationship definition

One great advantage Australia has in industries providing sophisticated goods and services is the large number of Australian speakers of Mandarin. Another is the base of knowledge and contacts built up through the trade in resources. This new architecture will provide an important platform for the government to progress negotiations surrounding the Free Trade Agreement, to build other trade and investment links and to resolve disputes.