THE average Australian household is $3400 better off each year as a result of the country's trade with China, a new report says.
This is chiefly because of higher prices for minerals that Australia sells to China and of lower prices for manufactured goods that China sells to Australia.
The report, by Allen Consulting, says the price of Chinese footwear, for instance, has remained the same for 13 years, despite inflation.
Victorian Premier John Brumby launched the report, which was commissioned by the Australia China Business Council and largely funded by Chinese resources giant Chalco, the listed arm of Chinalco whose bid for 18per cent of Rio Tinto is being considered by the Foreign Investment Review Board.
Mr Brumby said that 10 years ago when he made a speech forecasting that China would become Victoria's chief trading partner, "people said I had rocks in my head. But in 2007-08, it came true".
Chinese investment, while still relatively modest, has been heavily concentrated in just two sectors, the report says - real estate, and minerals and resource processing. The $6.8 billion Chinese investment approved by the FIRB in 2008 "far surpassed" previous amounts, of which about 80 per cent had been for resources.
The report says: "Trade with China has allowed Australian households increased access to goods of higher quality which are manufactured or more commonly assembled in China.
"These include the likes of Country Road clothing, Adidas shoes, IBM computers, Panasonic and Toshiba LCD televisions." Many such products are made in, but not so clearly by, China.
The report says: "Australia's strong trading relationship with China is likely to shield the Australian economy from the worst impacts of the global financial crisis because Australia is now less reliant than a decade ago on the worst affected - the US, Britain and Europe."
Australia, it says, is rare among industrialised nations in enjoying the benefits of strongly increasing terms of trade - the ratio of export to import prices - because it is a net exporter of commodities and a net importer of manufactured goods. About 200,000 extra Australian jobs have been created in the past five years because of this terms-of-trade increase.
"We have valuable commodities that China needs to fuel its massive industrialisation and urbanisation. At the same time, we import manufactured goods that China can supply at much lower prices than we could produce them.
"Australian households have a strong appetite for variety and value in consumer goods, which China supplies abundantly."
The report says: "Australia's liberal trade and investment agenda over recent decades, with low tariff barriers, has allowed Australians to source products from any country in the world."
Story
"the report, which was commissioned by the Australia China Business Council and largely funded by Chinese resources giant Chalco, the listed arm of Chinalco "
hmmm
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I am old Christiankiller
Sorry for offensive to our good religion christian brothers
I am not hating christians
