Analysts in Australia believe China’s economy is in transition and is moving away from a focus on global trade to a model based more on consumer spending and internal investment.
The country has set an economic growth target of five per cent. Analysts believe this is a modest figure, but Australian exporters are hoping that China will soon lift trade restrictions and tariffs.
China accounts for about a third of Australia’s global trade in goods and services. Government figures show this was worth $186 million in 2021, up from $162 million in 2020.
But increased diplomatic tensions between the two countries led to the imposition of tariffs and other restrictions by China on some Australian exports, including coal, barley and wine.
The center-left government in Canberra has been working to ease political friction with Beijing, which has been caused by various disputes, including disagreements over the South China Sea and origins of the COVID-19 pandemic.
Associate Professor Angela Knox of the University of Sydney’s Business School believes China understands that it needs to nurture ties with countries such as Australia to meet its economic growth targets.
“In Australia we probably knew that we had a very heavy dependence on China,” Knox told VOA. “Diversification is always a good thing. We should not be putting all of our eggs in one basket. So, where there are opportunities to expand and diversify, we should certainly be taking those kinds of opportunities and building those opportunities.”
Australian Prime Minister Anthony Albanese has said that his country must foster economic links with other countries including Indonesia and India.
Albanese visits India this week where he will focus on the South Asian nation’s rapid technological growth and expanding digital economy.
But Australia remains heavily dependent on demand from China.
Data from Australia’s Department of Foreign Affairs and Trade has shown that in 2021 commerce with China was worth more than the combined value of its trade in goods and services with Japan, the United States and South Korea.