Australia and China – the Relationship

Gerry Brady May 7, 2019 38 No Comments

The links between Australia and China started in the early 1850s when many Chinese immigrants came to Australia as indentured labourers working as shepherds, rural labourers, cooks and gardeners. In 1853, the first boatload of Chinese miners arrived in Victoria. Between 1854 and 1855, about 31,000 Chinese people arrived on the Australian goldfields. So Chinese people have been a part of the Australian population for over 150 years. Today, there are 1.2 million people living in Australia with Chinese ancestry.

China is Australia’s biggest trading partner and the two nations share a common destiny because of that. But this relationship has to be well managed because China outweighs Australia by a large degree. China has a population of almost 1.5 Billion people (1,500 Million) while Australia has just 25 Million people.

Nevertheless, Australia has an advanced economy that is one of the Top 20 economies in size  on the planet. This gives it a place in the G20 Group of Nations. The Australian economy is about $ 2 Trillion in Australian Dollar terms and about US$ 1.4 Trillion in US Dollar terms, about the same size as Russia’s economy. The Chinese economy is estimated to be US$ 12.2 Trillion. Some say it is much larger.

The Australian economy, like most advanced western economies, is principally dominated by the provision of services but construction and mining are large industries.  Services make up 61.1% of the economy, Construction is 8.1%, Mining is 6.9%, Manufacturing is 6.0% and Agriculture is 2.2% of the whole. The labor force is 12.7 million people. Measured in GDP per capita, Australia is the 10th largest economy on Earth.

China’s economy is changing its mix away from a heavy dependence upon manufacturing. The economy is now 51.6% services, 40.5% industry and 8% agriculture. The labor force is 803 million but falling due to aging demographics. Measured in GDP per capita, China is the 67th largest economy on Earth.

Australia exports total US$ 190 Billion and 31% of that goes to China. Imports are about the same US$ 196 Billion and China is again the major partner with 23.4% of that total. China is Australia’s largest services export market, valued at $15.8 billion, following the opportunities created by the China-Australia Free Trade Agreement. Services provision is growing rapidly.

China exports US$ 2.48 Trillion principally to the US, Europe and its ASEAN neighbour nations. They import about US$ 2.13 Trillion mainly from Europe, its ASEAN neighbours, South Korea, Hong Kong and Japan. Only 7.24% of its imports come from the USA.

Over 120,000 Chinese students study in Australian schools and universities and China is the largest purchaser of Australian Bonds. 1.4 million Chinese tourists visit Australia every year while 700,000 Australians visit China.

AUSTRALIAN GOODS EXPORTS TO CHINA

CHINESE GOODS EXPORTS TO AUSTRALIA

Graphical Reference: Wikipedia – China–Australia Free Trade Agreement

The graphs clearly show the huge growth in trade between China and Australia over the last 28 years since 1990.

__________

Make your own conclusions, do your own research. Avestix does not offer investment advice.

Disclaimer: All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice. The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research. Neither Avestix nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.

Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

Charts: Charts from Stockcharts.com The red arrows are drawn by Avestix and indicate price pulse directional dominance. Arrows indicate PAST price action (not future). No predictions are implied from past action.

 

Leave a Reply

Your email address will not be published. Required fields are marked *