Last year China replaced Japan to become
Australia's biggest trading partner. Now, according to recent coverage
in The Economist, Australia can’t "dig fast enough" to
meet China’s demand.
As noted in the article "Lucky Country," published in
last month’s edition of The Economist, Western Australia
exported close to A$8.5 billion of iron ore to China last year
alone.
Yet this is only one facet of Australia's overall export picture.
The country is also the world's largest exporter of coal. Exports
of zinc, lead, gold, nickel, manganese and copper are growing rapidly
as well. All of these natural resources are headed in China's direction
to supply the country's current building and electricity boom.
With China's electricity demand increasing by an estimated 13%
a year - and over three quarters of its power plants running on
coal – Australia and the "the looming dragon" will
likely continue as major trading partners for decades to come.
Australia's trade with China extends beyond its natural resources.
According to the Australian Trade Commission (AUSTRADE), close
to 4,200 Australian businesses now export to China, 3,000 Australian
Businesses are active there and the proportion of small and medium
sized businesses exporting there doubled in just two years.
"Our resources companies have been joined by architects,
construction companies, engineers, and logistics experts as well
as accountants, lawyers and a whole gamut of business services
in the China market," writes Tim Harcourt, Chief Economist
for the Australian Trade Commission. (Source: “Best
of the Rest – Australian Exports & Emerging Markets.")
As Harcourt points out, it's not just China that's buying Australia's exports.
It's emerging markets in general. According to research by leading financial
firm UBS, Australia's share of exports to developing countries rose from
53% compared to 43% 10 years ago. UBS nominates India, South Africa, PNG,
and the United Arab Emirates as other key markets for Australian exporters
to watch.
The "Looming Dragon"
"China is the big, looming dragon sitting on every chief
executive's desk….No company can afford not to think about
China," Christopher Wright of AUSTRADE, said in a statement. "Last
year, around 3,000 companies exported to China; more are manufacturing,
and increasingly more are investing."
According to a recent Austrade release to the media, China is
expected to be home to half of the world's building construction
between now and 2020.
Austrade's Country Manager for China, Peter Osborne, believes
this will create opportunities for Australian businesses offering
green building products or services, which could offset the controversy
centered on coal exports and their role in climate change.
"Not only has the Chinese Ministry of Construction instructed
all Chinese cities to cut their building energy use in half by
2010, but there is also a plan to retrofit a quarter of existing
public buildings to increase their energy efficiency in the same
time frame," Osborne said.
Industry insiders like EnviroBond General Manager Asia Pacific,
Neil Young, believe that more property developers, architects,
and builders in China will soon be demanding a wide range of environmentally-friendly
products.
This means that Australian companies like Rapidwall, which has
created a low-cost plaster derived from the waste product of power
generation plants, have a ready market for their product. Rapidwall
has already been used for a variety of buildings in China, including
community centers, factories and supermarkets, as well as residential
homes.
What do Australians think?
Overall, many Australians consider China's economic rise as an
opportunity.
"Australians do not seem to suffer from the faint unease
about China's rapid growth that often afflicts Europeans and Americans." states
The Economist.
Sydney-based think tank, the Lowy Institute for International
Policy, conducted a poll last year that showed the majority of
Australians said they had positive feelings towards China and saw
it as their country's most important economic partner. Only 19%
said they were very worried about China's growing power.
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