So I was reading an article recently about the exports to China slowing down. Apparently this has had a negative effect on the Australian economy. Who knew we were so intimately linked to the Asian market. So what is the reality of the Australian economy now with its linkages to China?
“China is a big reason for that economic resilience. Australia sailed through its toughest challenge, the global financial crisis, thanks largely to China’s appetite for mined-in-Australia iron ore, coal, and other minerals. China is Australia’s No. 1 trading partner, accounting for more than a third of its exports.”
So Australian exports are contributing to the growth of the Chinese economy and also contributing to the economic bubble that the Australian population has been living in for the past 2 decades. It’s similar to other cases such as Canada where it was not hit as hard as the U.S. due to their exports as well and their oil. Now that China has cut down on its use of Australian coal the Australian companies have been diversifying to keep the economy fresh. They have been reaching out into other industries such as cattle ranching and finding new inventive commodities to export to China as the middle class grows. A very interesting outlook on the dynamism of the market and from North-South trade from a new angle.