Economic Growth In China Beneficial For Australia

May 20, 2009 – Tim Harcourt, the Chief Economist of the Australian Trade Commission said the level of economic growth in China was in turn beneficial for trade and investment in Australia.Economic Growth In China Beneficial For Australia

At the Australia China Business Forum, Harcourt said that “Trade and investment links with China and other emerging economies are going to help Australia survive the global credit crisis”.

Harcourt that said in spite of the overall economic downturn worldwide there was a predicted growth rate of between 6 and 8% in China this year, which in combination with the figures for their industrial production suggested that the nation was returning to a level of sustainable growth, especially in second and third tier cities in western China.

He added that in comparison with a rate of forty three percent in 1999 the share of exports to emerging countries in Australia has risen to fifty three percent and in particular exports to China has risen by an average of 25% annually during the same period.

Harcourt said that “According to research commissioned by the Australia China Business Council, the average Australian household now benefits to the tune of AU$3,400 (US$2,550) a year from Australia’s trade with China”.

“Investment is also an increasingly important part of the Australia-China relationship. Strong outward FDI flows from China are replacing the traditional trade route as a form of global engagement.”

The Australian Bureau of Statistics says that the total foreign investment stock in Australia from China amounted to $6.2 billion AU two years ago which represented a seventy eight percent year on year increase and over the last five years a total of a 120% increase.

He went on to say that “Current levels, while still relatively modest, indicate the strong potential for China to grow its foreign direct investment position, and given recent FIRB approval trends, we should see a marked increase in China’s total FDI investment in Australia in 2008 and 2009”.

Harcourt said that the significant stimulus measures that had been implemented recently had had a good reception in China and had helped to strengthen the economy in a number of different areas.

“While there remains a range of challenges to deal with, the general view is that China will continue to make a major contribution to world economic growth in the short and medium term”.