he importance of China to our economy over the past 15 years can hardly be overstated, but with that importance comes risks. A new study by researchers at the IMF looks at the links between the Australian and Chinese economies and examines the risks to Australia from both positive and negative shocks to the Chinese economy – and concludes that the best mitigation is to continue to diversify our economy towards the services sector and also to other Asian markets.
The importance of China to Australia is perhaps best demonstrated by the change in the amount of our merchandise exports that go to that country now compared to 15 years ago.
Back in 2003 China took 7% of our merchandise exports – less than went to Japan and Korea. Now it takes 32.7% – more than goes to not only every other nation, but more than goes to all non-Asian nations combined: