China can’t bail us out for much longer
Is China Australia’s lifeline or our economic crutch?
After the past 20 years of China buying every rock we could sell, I’d say it’s a case of both.
In the early 2000s, China swooped in and began purchasing commodities in large volumes. The fact that the Aussie dollar was worth roughly half one greenback in the wake of the dotcom bust probably helped.
The Middle Kingdom’s shopping spree enabled Australia to avoid the worst of the economic fallout felt in the US as the tech bubble unravelled. The US market woes were then compounded by the September 11 attacks.
Our export businesses began to boom. China became out biggest trading partner, so we walked away relatively unscathed from 2001’s shock events.
Less then a decade later, the US stock market imploded on the back of the great financial crisis.
This time, China doubled down.
The Chinese government started throwing bucket loads of money into infrastructure projects…the majority of them built with Australian commodities.
In the 10 years since the financial crisis, Chinese business has morphed from being our biggest trading partner to perhaps our largest liability.
Aussies rely on China to buy things. If, for whatever reason, the Chinese economy slows down, ours stops completely.
Today, I’ll hand you to Jim. He’ll give you a rundown on how the US-China trade talks are playing out.
And according to Jim, the worst is still to come…
Until next time,