There’s been much talk about China’s impact on the Australian economy.
The outlook for Australia’s exports, in particular resources exports, is largely dependent on the prospects of the Chinese economy.
China accounted for 32.5% of Australia’s goods and services exports in 2014/15.
Moreover China accounted for 80% of the total growth in Australia’s exports in 2013/14
Of course even more important is China’s impact on the world’s economy
This is probably because the pace and scale of China’s economic transformation in the last 30 years has no historical precedent.
Back in 1978 China was one of the poorest countries in the world; today China is the second-largest economy in the world.
But China’s economic growth has faltered and earlier this year the Chinese economy was at the centre of global attention when the Shanghai stock market took a tumble.
Recently the World Economic Forum published 6 charts that explain China’s role in the global economy:
1. Shanghai SE composite Index collapsed
2. The falls have been sparked by concerns that the Chinese economy is slowing
Source: Chinese National Bureau of Statistics; Vox
3. A Chinese slowdown has a big impact on the global economy, in particular commodity-producing economies, because China consumes so much raw material
4. A slowing China is one reason why commodity prices are weak
5. Many major economies are also dependent on exports to China
Exports from G-20 member state to Mainland China, as a share of the country’s total exports (in percent).
6. Nervousness over China comes as the world becomes more reliant on it (and other emerging market countries) to drive global growth
Source: The Economist