The case for greater engagement with the world's fastest growing economy
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Growth 55: China in Australia's Future
Growth 55: China in Australia's Future
Posted : Wednesday, November 18, 2009
China will become Australia's most important economic partner in
history in the next two decades. Growth 55: China in
Australia's Future shows that our relationship with China as
the potential to strengthen our economy over the coming 50 years.
The opportunities for Australia and Australian businesses in China
dramatically outweigh the risks, and we need to escalate our
engagement with China sooner rather than later.
Report highlights
Opportunities for Australia
As one of the world's most service-oriented economies, Australia
is well-placed to serve China in fields such as property and
business services, communications, finance and insurance, transport
and education. Australia's largest organisations will find it
easiest to operate at Chinese scale.
Australia, with its commodities and services, is strongest just
where China is weakest. Demand for food, energy, industrial raw
materials, services and intellectual property is rising.
China's internal economy is expected to develop rapidly over the
coming decades. This represents a huge opportunity for Australia in
markets such as food and tourism.
The long-run change
China's rise in the last decades of the 20th century and the
early 21st century represents a re-emergence. China was the world's
largest economy for most of the past 1500 years; as recently as two
hundred years ago, it accounted for perhaps one-third of global
economic output. In the 21st century, it is poised to assume
something like that importance again.
As a major resources exporter and manufactured goods importer,
Australia more than most advanced economies has an opportunity to
build a complementary relationship with China through the coming
decades.
The dimensions of growth
China's exports and imports both grew from 1 per cent to well
over 5 per cent of world trade between 1980 and 2004. China is
becoming Australia's "super-customer". It has already reversed a
decades-long decline in Australia's terms of trade (the ratio
between our export and import prices) and driven them to a 30-year
high.
China's growth has been driven by manufactured goods, as it
becomes "the world's factory". Much of that growth has been driven
by foreign investment, particularly from Hong Kong and Taiwan.
China remains heavily dependent on the outside world for design and
componentry. But China is now starting to compete in
higher-value-added manufactures.
About the report
The report was launched by the Shadow Minister for Foriegn
Affairs and International Security, Kevin Rudd.
CEDA's partners on China in Australia's Future were
HSBC, Rio Tinto and Deacons.
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