Chinese ties that bind

China’s economic grip over  Australia is increasing rapidly. It used to be the maxim that when Wall Street sneezed the rest of the world caught a cold. In Australia’s case nobody wants to see China catching a cold because the ramifications  Down Under would be extremely chilly.

So here is the data: Over the past year exports to China have hit a record $A101.4 billion, that’s up 31.9 per cent over the year. China now accounts for a record 36.9 per cent of Australia’s total exports. It’s our biggest trading partner and growing quickly.

In March Australia’s rolling annual trade surplus with China rose from $50.9 billion to a record $51.9 billion, which Commsec economists calculate translates to over $2200 for every Australian person. To put this in perspective the share of exports going to Japan and the US remained at or near record lows. In the month of April, Australia shipped goods totaling $9148 million to China.

Australia’s imports from China hit a record $49.5 billion in the year to April, up 11.0 per cent on a year ago and accounting for 19.8 per cent of Australia’s total imports.

Commsec points out:” China is dominating Australia’s trade like no country, apart from the UK, which held sway many decades ago.”

But in a cautionary note on the outlook for China’s economic growth, it reports that big Asian specialist banking group HSBC reported in May that its gauge of services sector activity in China eased from 51.4 to 50.7. This is just above the 50 line that divides expansion from contraction.

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