As China and other advanced economies suffer mutual disillusionment, Australia needs to figure out how it maintains its sweet spot in China’s economy.
breakdown of China and Australia’s post-trade war economic relationship by the numbers tells two important stories.
. Inbound investment from China has collapsed since 2016, and only half the number of Chinese tourists are now coming. Everything, from flights to university research projects, is declining. China already has 31 per cent of global manufacturing capacity, so nobody is going to make more room for it. And the euphoric belief among Western businesses in the 1990s and 2000s that China would reciprocate by liberating Chinese consumers has long evaporated. China’s import share of GDP is now 15 per cent – with microchips in the lead – from 30 per cent in 2005.
China’s 55 per cent urbanisation rate remains well below other big East Asian economies, which will also drive more demand for commodities. More city dwellers will lift the unusually low level of consumption that China seems reluctant to stimulate, and which is feeding the suspicion overseas that Mr Xi wants to export his way out of trouble.
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