中国经济对澳大利亚的影响(英文)

QuestionExamine the effects of a China “hard landing” on the Australian economy. What effect would this have upon the industry mix in the Australian economy over the short and medium term? For discussion please contact haichen.yang1999@Table of Contents1 Define the “hardlanding” quantitatively (3)1.1 Chinese Domestic Consumption (3)2 Impact on Australia (3)2.1 Impacts by industry (4)●Mining Industry (4)●Tourism Industry (5)●Share Market (5)2.2 Global Impact on the Australia’s economy (5)3 Australia Government Policy (6)4 Conclusion (7)References (8)1 Define the “hardlanding” quantitativelyChinese economy has been growing at 10% over 30 years, but the current growth rate has been reduced to around 8%. When the hardlanding is discussed, what the GDP growth rate will be? In this essay, excluding the extreme cases, the factors of weak demand, bad banking loan etc suggested by Durden [1] will be considered in analysing economic slowdown (Figure 1).Figure 1 Crisis Triggers1.1 Chinese Domestic ConsumptionThe exports consist of only 27.5% of China’s GDP [2] the slump of domestic consumptions would be a key factor of its slowdown. Compared with other general consumptions, the most important factors of keeping strong domestic demand growth will be housing industry and heavy infrastructure investments as the Chinese population growth rate is only 0.47% [3]. Due to the urbanization and industrialisation, the housing market of China has been growing significantly for 30 years, but in recent years there has been a clear sign of oversupply in median sized cities [4]. In big cities, like Beijing, the house price, however, is still in upside and has created a danger situation of bubble bursting. The infrastructure investment in China has been growing at 20 per cent to 40 per cent each year for the past decade and is now much more than 50 per cent of gross domestic product, which is evidenced in the following sectors:●Express highway: the China’s express ways have been well developed along the major cities.Heavy investment will not be expected in this sector in a short term.●High-speed rail: by 2010 the length has reached 8,358km; according to China’s “10-year planof high-speed rail”, the rail length will be 16,000km, around ¥3.5tb investment by 2020 [5].The Chinese government has been concerned of the house bubble for years as a number of construction corporations will bankrupt if bubble bursting, result in high unemployment rate and large bad debts in banking sector, like the US financial crisis in 2008.Assuming that there is no other shock to external demand, imports, like iron and ore, would probably fall more sharply. Considering all these together it suggests that in case of bursting crisis the China’s GDP growth at only 3% [1].2 Impact on AustraliaTo assess the impact on Australian economy, the relationship with China has to be quantitativelyidentified by analysing both imports and exports. Dominated by iron and coal products China has been the biggest trading partner of Australia and the biggest exports destination for almost a decade. In 2012 Australia exports to China is A$73.5b, ie 29.5% of total exports [2] and 6% of Australia’s GDP (Figure 2).Figure 2 Trade Statistics2.1 Impacts by industryIn case of hardlanding the consumption of China will be in downside as well because of the job cuts and less public spending, the consumers would tend towards saving rather than spending. Along the mining industry other industries, such as tourism, property and education industries, will catch the crisis. Due to the limitation of context, only mining and tourism industries will be discussed hereafter.Mining IndustryCorporations in iron, coal and gold sectors will be hit hardly, for example BHP. As news agency AAP reported, “Around 30 per cent of BHP’s business comes from China in the form of iron ore exports, a relationship which largely shapes Australia’s reliance on the Asian economic superpower.” [6]Considering BHP’s revenue of US$72.2b in 2012 [7], it is very likely that BHP will be the first victim of China’s hardlanding. Others, such as Rio Tinto and Fortescue Metal, cannot be immutable from the crisis.Mining directly employs 217,100 in 2011, while the biggest employer BHP currently has 46,370employees [8]. It is difficult to estimate indirectly employment figures if infrastructure and services were counted, but it was suggested the relationship could be around 1:1 [9]. In other words, 420,000 jobs are associated with the mining industry. Assuming the scenario of the hardlanding going further, it would be expected that around 80,000 persons nationwide will lose their jobs and contribute around 1% unemployment rate [10].●Tourism IndustryTourism’s direct contribution to Australia’s GDP was worth $34.6 billion in 2010–11, 2.5% of GDP. There were around 513,700 persons employed directly in tourism in 2010–11. Being a labour-intensive industry, tourism’s share of jobs in Australia (4.5%) was greater than its direct economic contribution (2.5%) [11].Australia’s inbound Chinese tourism market has grown rapidly in recent years. The Chinese market has grown to be Australia’s largest international market by expenditure ($3.8 billion in Australia in 2011–12), and Australia’s third-largest market in terms of arrivals over the same period (around 551,000 arrivals) [11]. In case of China’s hardlanding, the tourists from China will be significant down, and the total income from the tourism industry will shrink around 10% or 20,000 jobs layoff.●Share MarketMining resources sector represents almost 20% of the ASX market by capitalisation [12]. Australian share market will be seriously impacted by China’s hardlanding, in which BHP, Rio Tinto can be seen as the triggers of potential market crash. It is hard to predict the percentage of market drop, but All Ordinaries Index at 3,500 on 2009’s level will not be a surprise. In other words, nearly A$437b market value [13], on average A$77,000 per family, will be wiped off.2.2 Global Impact on the Australia’s economyAs China is a part of the global economy, a slump in China’s GDP growth to 3% would cut the global GDP growth forecast by 0.6%. Along with China, Korea and Japan are also the most important trading partners of Australia. As both of countries have great exposures to Chinese economy (Figure 2), in case of crisis the exports to these countries will be in downside as well, which will reduce Australia’s GPD growth further.Figure 4China’s hardlanding could cause the global economy in recession, and the compound effects onAustralian GPD could be around -4% (Fiure4 [1]). Considering the current 3% GDP growth rate of Australia, the crisis could cause -1% GDP growth rate, which will have tremendous impact on individuals, businesses and industries; the current unemployment rate at 5.6% will be doubled over 10%; the government will cut the spending on public sectors and/or borrow from overseas.3 Australia Government PolicyWhen the crisis happened in Australia, the government will have to take the action against the crisis developing further.Figure 5 Australia Government BudgetIn 2011/12, the government revenues are $321.8b and total expenses are $354.6b (Figure 6) with budget deficit at $32.8b (Figure 5) which is of 3% of the country's GDP [14].Figure 6 Australia revenue and expensesIn case of crisis, the government revenue will be reduced dramatically. To keep the country running properly, the government may have to increase the budget deficit, like the current government increasing the nation’s debt ceiling to A$500b [15]. In doing that, the government will have to sell its national assets or borrow from the international market. Likely selling national assets should not be the best option at the time, but borrowing the money will be subject to the constraints, like Greece and Spain.A question is raised here, how much will the government need in case of emergency? Historically there is no such figure to support the prediction, but the bailout plan applied to Greece might be a reference. Greece has received 148.6b euros since May 2010 [19]. As Australia’s population is two times larger than Greece’s, approximate 300b euros (A$428b) will beexpected.As the federal reserve of Australia is limited to A$45b [17], a tough budget cut will be inevitable. In 2010-2011, the government spent $115b, 32% of its income in the sector of social security and welfare. Any cutting in this section could cause social instability as pensioners and low-income families heavily rely on the government support, but other sectors such as education, industry and workforce, government spending should be cut sharply, lead to another round job cuts and more social security support.For the security reason banks could increase the interest rate, lead to the housing price down and less investment in property market. Putting all these factors together, almost every Australian will be affected and the whole country will be in recession, which could last a few years until the global economy starting a slow recovery.4 ConclusionChina’s hardlanding will have a significant impact on Australia. In that scenario, a negative GDP growth, share market crash and high unemployment rate could happen in Australia; budget cut and austerity measure would be expected. The assumption of China’s hardlanding, however, is purely hypothetical as China with $3.7tb national reserve should have the options to prevent the crisis and stimulate its economy. Currently Australian economy is still in a good shape which is evidenced by the rise in export growth in mining industry this year and boosted Australia's nominal GDP by about 0.9 percentage points [18].References[1] T. Durden, “A Hard Landing In China Part,” 1 8 2013. [Online]. Available:/news/2013-01-08/hard-landing-china-part-2-rest-world-impact.[2] A. Government, “China Facts,”Department of Foreign Affairs and Trade, June 2013.[3] Wikipedia, “Demographics of China,” Wikipedia, [Online]. Available:/wiki/Demographics_of_China.[4] Sohu Focus, “The Day of Tomorrow,” Sohu, 18 4 2013. [Online]. Available:/news/2013-04-18/3156154.html.[5] Y. Lin, “Finance QQ,” Tengxun , 18 4 2012. [Online]. Available:/a/20120418/007899.htm.[6] K. Sayce, “Why BHP Will Be the First Victim of China’s Economic Collapse,” Money Morning, 06January 2012. [Online]. Available:.au/20120106/why-bhp-will-be-the-first-victim-of-china%E2% 80%99s-economic-collapse.html.[7] BHP Billiton, “BHP Billiton Annual Report,” BHP Billiton, 2012 .[8] Wikipedia, “BHP Billiton,”Wikipedia, [Online]. Available:/wiki/BHP_Billiton.[9] PWC, “Pilbara Population and Employment Study,”2012.[10] A ustralian Bureau of Statistics, “6202.0 - Labour Force, Australia, Oct 2013,”[Online].Available: .au/ausstats/abs@.nsf/mf/6202.0.[11] A ustralian Government, “Tourism Research Australia,”December 2012. [Online]. Available:.au/tourism/Documents/tra/Snapshots%20and%20Factsheets/2012/China_ Snapshot_FINAL.pdf.[12] W ikipedia, “Mining in Australia,” Wikipedia, [Online]. Available:/wiki/Mining_in_Australia.[13] A SX, “Historical market statistics,”ASX, [Online]. Available:.au/about/historical-market-statistics.htm#End_of_month_values. [14] T rading Economics, “AUSTRALIA GOVERNMENT BUDGET,” [Online]. Available:/australia/government-budget.[15] J. S. &. M. Heath, “Australia Faces Debt Ceiling Impasse as Hockey Warns of Cuts,”Bloomberg , 14 11 2013. [Online]. Available:/news/2013-11-14/australia-faces-debt-ceiling-stand-off-as-hockey -warns-of-cuts.html.[16] R EUTERS, “Factbox - Greek bailout facts and figures,”REUTERS, Nov 2012. [Online]. Available:/article/2012/11/13/uk-greece-factbox-bailout-idUKBRE8AC0KE20121113.[17] R eserve Bank of Australia, “Reserve Bank of Ausralia Annual Report,” 2013.[18] G. Kwek, “Iron ore exports and prices boost growth,”The Sydney Morning Herald , 6Novermber 2013 . [Online]. Available:.au/business/the-economy/iron-ore-exports-and-prices-boost-growth-20 131106-2x11w.html#ixzz2jusQRa8d.。