Since overtaking Japan in 2009, China has been Australia’s largest export market, outweighing South Korea, India, the US and UK (in third through sixth places) combined. While growing reliance on this trade is a source of anxiety to many Australians, former ambassador Geoff Raby argues at Caixin Online that China’s growth might be harnessed to unlock new economic opportunities:
In the steel sector, we have vast deposits of iron ore and metallurgical coal. The problem has been that they have been on the opposite sides of the country and with our high internal transport costs have been uneconomical to combine and produce steel in commercially viable quantities.
China’s steel production is now over 700 million tons, almost double what is was when I first went to China as Ambassador. Soon China will have a steel sector of close to 1 billion tons per annum. The world has never seen anything on this scale before and, of course, Australia will continue to be a major source of iron ore and coking coal. At the same time China’s wages and costs rising rapidly, especially in the eastern seaboard provinces where much of China’s new steel making capacity has been relocated.
The challenge then for Australia is how do we make ourselves an integral part of the plans to restructure the Chinese steel industry? This is a historic opportunity for Australia to add value to Australia’s resources ….
The challenge for Australia in China’s growth over the next twenty years is not to stand back from it, or try to pretend it is not happening or will go away, or seek to build closer relations with smaller weaker states. It is to recognize the reality of it and the vast implications it holds for Australia, possibly more so than for any other country, and to imagine how we can use it to strengthen Australia and increase its prosperity.
See also Chinese “Land Grab” Tests Australian Farming Dynasties, via CDT.