The latest news out of China and the immediate pre-election business confidence survey point to a far less gloomy picture of Australia’s economic future than the confected crisis that both sides of politics were spruiking in the run up to the election.
Whilst there is a wind down of the largest mineral export investment boom we have seen in recent history there is no need to fear imminent doom.
As per our comments in previous issues of The Word ;
China may have slowed from unsustainably record levels of GDP growth, but it is settling into steady high growth that clearly outstrips almost all other economies.
As the Chinese continue the urbanisation and infrastructure development of their vast country, and move to underpinning their economy with a more sustainable balance of domestic and export demand, we can expect a continued steady demand for our resources.
The challenge for the new Australian government will be to ensure that our trade with China continues to grow in both directions. We need to look to add higher value imports to the low value consumer goods we have been taking from China and thus underpin our position as a preferred trading partner and resource supplier. Not a particularly easy task when geopolitical matters are brought into the equation.
However, as is often said, if it were easy then everyone would be doing it.
Australia remains a strong economy with great future prospects. Let’s hope that the steady stewardship promised by the new government is delivered and that we do not once more fall victim to rapid fire politically motivated policy changes.
There is no crisis in the Australian economy, but there is an urgent need for wise heads to maximise the opportunities