Home > Overseas Investment News > Australian economic strategy
Australian economic strategy
2014-05-28
Brief:Chinese economy-the second largest one in the world, is playing an increasingly important role in decision-making of its economic partners. China is Australia's biggest trading partner, accounting for about 36.7 percent of its exports.The China-led investment boom in resource has helped Australia-a resource-rich nation to better weather the global financial crisis than most developed nations.
Chinese economy-the second largest one in the world, is playing an increasingly important role in decision-making of its economic partners.
 
As in Australia, China's growth pattern focusing more on service industry  drives the country to learn more about Chinese consumers.
 
Let's take a closer look...
 
It's been a tough federal budget this week for Australians...
 
While the headlines has been full of Treasurer Joe Hockey's cuts to family welfare and tax increases for the wealthy.
 
The real story is tied to Australia’s economic reliance on the China-fuelled resources boom transitioning to a more consumer-led development.
 
CHRISTIAN EDWARDS, CNC Correspondent:
"Under Beijing's unique application of human-centered development, the Chinese consumer is now in the driving seat of the domestic economy.And measuring what this means for countries like Australia who just this week released its federal budget is what Westpac hope they can grasp."
 
Australia’s Westpac bank, through a knowledge partnership with the Deutsche Borse-backed MNI, will produce the Westpac MNI China Consumer Sentiment Indicator.
 
HUW MCKAY, Westpac's Senior Economist
"In China the consumer is becoming the heart of the economy - so its the collective psyche of Chinese consumer which is probably the key assumption that you need going forward to understand where the Chinese economy is going to go and how its development path is going to proceed. So we need to measure the Chinese consumer better we need to know what is driving their confidence levels."
 
China is Australia's biggest trading partner, accounting for about 36.7 percent of its exports.
 
The China-led investment boom in resource has helped Australia-a resource-rich nation to better weather the global financial crisis  than most developed nations.
 
However, prices of Australia's two biggest export earners-iron ore and coal have fallen off a cliff, which signals a necessary change in Australia' economic strategy.
 
Now the country must pivot away from resource investment toward services exports to its largest trading partner.
 
Its budget has taken into account the crash in spending on major resource projects which drop from A$66.16 billion in 2013-14 to just A$11.77 billion by 2016-17.
 
McKay says the Chinese household sector is already an important factor in the determination of global growth, and that importance will increase over time.
 
HUW MCKAY, Westpac's Senior Economist
"We've found that the Chinese household sector is actually a very rational observer - not only of their own situation - but asset markets in the economy and the broader business conditions."
 
China's policymakers have always recognized that domestic demand lies at the basis of any lasting design for Chinese growth.
 
But the capacity to track confidence remains one of the jewels in the crowning achievements of China's developmental success story.
 
The Westpac MNI China Consumer Sentiment Indicator will play a considerable role in Australia’s measurement of Chinese consumer confidence.
 
CHRISTIAN EDWARDS, CNC Correspondent:
"The release later this month, of a new measurement of Chinese consumer sentiment reflects the growing influence of the Chinese consumer to global markets - and the high-stakes race to crowd-source its hidden knowledge."

CNC News

Please contact us in case of Copyright Infringement of the photo sourced from the internet, we will remove it within 24 hours.
Relevant Information