Could China kill off Australian prosperity?

[Gob]

A leading China analyst says Australia should beware of a likely "jasmine revolution" in China.
The warning came from Will Hutton, an author and governor at the London School of Economics, who says China is a "tinderbox" as Prime Minister Julia Gillard embarks on a trip to the country this week.

China buys one quarter of all Australian exports and any destabilisation of the middle kingdom could have serious consequences for Australia, Mr Hutton told the ABC.

China has embarked on a new round of brutal suppression of activists and dissidents, including renowned artist Ai Weiwei, in a bid to pre-empt the so-called "jasmine revolution" following the "Arab Spring" uprisings that swept through North Africa and the Middle East.

Mr Hutton said while it was not clear when China could be hit by a people's revolt, it already had a fragile financial system that could lead to further social unrest.

"There's an iron rule in economics - you know, what's unsustainable can't be sustained," Mr Hutton said about China's increase of its foreign exchange reserves to $US3 trillion ($2.86 trillion) - up a hefty $US600 billion in 12 months.

"The Chinese cannot carry on acquiring foreign exchange reserves like this. It's a massive distortion. This is all about to blow, and if you're in Australia, beware."

Mr Hutton, who was also an editor-in-chief at British newspaper The Observer and has written the book The Writing on the Wall: China and the West in the 21st Century, said the Chinese were extremely self-confident, but warned that "pride comes before a fall" and the country was "an accident waiting to happen".

"They really believe that it's the Chinese century. They really believe they - despite the problems, they can handle them, and they really think that they're emerging as Asia's top dog.

"And they will be understanding the visit of the Australian prime minister as, not quite in these terms, but nearly a form of tribute being played by a client state.



Read more: http://www.smh.com.au/national/revolt-i ... z1JwzRKzZY

[@meric@nwom@n]

I have read similar. Que sera sera, eh?

[The Hen]

This is one reason I enjoyed having a Prime Minister who was fluent in Mandarin.

[rubato]

Isn't your biggest export to China coal?

There is very little chance of a large decrease in the near future unless they start buying coal from someone else. Who? Long term it would be better for the rest of the world if you shipped them less and they burned less. Mercury from burning your coal pollutes the oceans we all depend on for fish.

yrs,
rubato

[Gob]

In 2009 China surpassed Japan to become Australia's largest export market, with total merchandise exports to China valued at A$42.4 billion, an increase of 31.2 per cent over the previous year. Resources continue to underpin Australia’s exports to China. Australia exported 266.2 million tonnes of iron ore to China in 2009 (A$21.7 billion in value terms), an increase of 45.2 per cent over the same period in 2008. Australia's coal exports to China grew by 1000 per cent last year to become our second largest export commodity, behind iron ore. Over the last 12 months, two further LNG contracts have been signed for the supply of Australian gas to Chinese terminals. The future prospects for continued growth in our resources exports to China are good.

Australia exported A$3.4 billion in agricultural goods to China in 2009 representing a fall of 2.2 per cent over 2008. Wool was our largest agricultural export to China (266,141 tonnes worth A$1.38 billion in 2009 – 66 per cent of China's total wool imports). However, wool exports to China fell 3.9 per cent in 2009, reflecting partly China's deteriorating export performance. Strong export growth in agricultural goods was recorded in canola, live animals, fish, edible products, wine and meat.

In the past ten years, China has risen from our 10th-largest export market for elaborately transformed manufactures (valued at A$642 million in 2000) to our third-largest (valued at A$1.8 billion in 2009). In the medium to long-term, Chinese government stimulus efforts are likely to impact positively on Australian exports of simply transformed manufactures (for use in the construction/infrastructure sectors) and elaborately transformed manufactures.

Australia's services exports to China, valued at A$5.5 billion in 2009, are dominated by educational and recreational travel and have averaged annual growth of 18 per cent over the past five years (the value of Australia's service imported from China was A$1.47 billion in 2009, a decrease of 8.7 per cent). China remains Australia's largest source of overseas students, with around 155,000 enrolments in Australian educational institutions in 2009. The official estimate of "actual students" in 2009 was 118,000.

China is also Australia’s largest source of imports, with China’s total merchandise exports to Australia valued at A$35.8 billion in 2009, an increase of 1.5 per cent on the previous year. Major imports from China include clothing, communications equpment, computers, prams, toys, games and sporting goods, furniture and televisions.


http://www.china.embassy.gov.au/bjng/relations2.html

[Gob]

The Australian dollar has continued its record-breaking march towards the 110.00 US cent mark, charging through 109 US cents on its way to another post-float peak.



Shortly after the local sharemarket opened at 10am, the local currency was trading at 109.04 US cents, the highest level since February 1982, almost two years before the dollar was floated.

The Aussie continued to benefit from a weak US dollar, which came under further pressure after the US Federal Reserve gave no indication early today that it would raise its interest rate anytime soon.

Since 5pm yeterday, the Australian dollar had traded between 107.79 US cents and a new post-float high of 109.04 cents, recorded about 10.15am.

Following the five-day Easter and Anzac Day weekend, the local unit yesterday traded as high as 108.52 US cents after headline inflation figures for the March quarter came in at their highest since the June quarter of 2006.

Travelex head of dealing Bernie Tuck said although the dollar was likely to 109 US cents today, he said it was expected to be a quieter session following the flood of economic news in Australia and the US in the past 24 hours.

“The fundamental fact is that the Aussie is incredibly strong at the moment. The US dollar is weak across the board and there is no indication that the US is going to raise rates any time soon,’’ he said.



Read more: http://www.smh.com.au/business/markets/ ... z1Km4BQCKj

[quaddriver]

Isn't your biggest export to China coal?

There is very little chance of a large decrease in the near future unless they start buying coal from someone else. Who? Long term it would be better for the rest of the world if you shipped them less and they burned less. Mercury from burning your coal pollutes the oceans we all depend on for fish.

yrs,
rubato

try the US. 3 western railroads are building shipping ports to load large colliers with metalurgical coal at a rate that surpases austrailias entire stash. why we feel the need to give everything away is beyond me, but since its illegal to burn it here....

[Big RR]

Illegal to burn coal? Sure you're not confusing it with marijuana?

[quaddriver]

Illegal to burn coal? Sure you're not confusing it with marijuana?

Im being slightly facetious.

we have enuf home grown coal to power EVERYTHING for a couple centuries, but no one will grant or be granted permission to do so.

apparently, it is more politically and environmentally expedient to burn home heating gas or imported fuel oil

[Gob]

Interesteing fact that quaddriver. I never knew the US was so coal rich.

Percentage of world coal reserves held.

United States 22.6 %
Russia 14.4 %
China 12.6 %
Australia 8.9 %

http://en.wikipedia.org/wiki/Coal#World_coal_reserves

[Gob]

But then:

Major coal exporters

Australia 26.5%
Indonesia 24.0%
Russia 12.0%
Colombia 6.9%
South Africa 6.8%
USA 5.5%

Probably due to Aus having a smaller population and manufacturing base, it is able to export more?

[quaddriver]

I need to look up the exact issue of 'Trains' to get the pertinent info, but the reason we dont export more is lack of west coast shipping terminals built to do so. the machinery is different between offloading doublestacks vs loading coal. and extreme cases of NIMBYism abound. Prolly cuz it would be beneficial to the US monetarily...(there goes my cynicism again)

[The Hen]

Prolly cuz it would be beneficial to the US monetarily...(there goes my cynicism again)

It would certainly be in the interest of Australia that you didn't ramp up your exports to China.

On behalf of my country I thank you very much for not doing so already.

[quaddriver]

fyi march 2011 Trains, p6-7

you are safe right now, local residents nixed 2 plans at 2 ports thus far.

[rubato]

The Australian dollar has continued its record-breaking march towards the 110.00 US cent mark, charging through 109 US cents on its way to another post-float peak.



Shortly after the local sharemarket opened at 10am, the local currency was trading at 109.04 US cents, the highest level since February 1982, almost two years before the dollar was floated.

The Aussie continued to benefit from a weak US dollar, which came under further pressure after the US Federal Reserve gave no indication early today that it would raise its interest rate anytime soon.

And will anyone ever give a flying fuck?

Aus is a tiny economy, smaller and less important than Canada.




yrs,
rubato

[The Hen]

On a global scale, yes. It doesn't matter one whit.

However on a personal level, it is nice to be in this position at this moment.



Thank you very much. I'll be here all week.

[rubato]

And back in reality ...

Being pleased because your currency is up at the moment is one of the least sentient reactions I can think of.

An exchange rate is an exchange rate. Up is good in some ways but bad in others. Down is good in some ways but bad in others too. There is a perfect symmetry about the whole thing which makes neither inherently beneficial nor a source of pride and satisfaction.

When the dollar goes up I can buy French wine and German cars for fewer dollars. Good for me! When it goes down, my investments in European, Asian and international funds all go up and US exporters all make more money. Good for me!

And well ... I have perfect control over when I buy French wines, German cars, and EAFE funds.

I'm amazed that these things aren't obvious to everyone.



yrs,
rubato

[Gob]

The Australian dollar touched a new post-float high today when it climbed above the 110 US cent mark.

The Aussie hit 110.11 US cents shortly after 10.30am today, according to Bloomberg. The dollar last saw 110 US cents in December 1981.

The latest high continues a record-breaking run for the local unit. It was also buying 74.1 euro cents, 89.1 yen and 65.7 pence - not far off a 26-year high against the British unit.

Director of Rochford Capital Derek Mumford said the Aussie dollar's rise was driven by the weakness of the US currency.

"There's no reason to buy the US dollar," he said. "It could certainly go further down fuelling demand for the euro and Aussie dollar."

Mr Mumford said that although European nations face huge debt burdens like those depressing the US dollar, the greenback "is winning the ugly contest" at the moment.

The Aussie dollar could push as high as 112 US cents in the near term, he said.



Read more: http://www.smh.com.au/business/markets/ ... z1L9vTQClY

We've been buying stacks of stuff from the UK, as the dollar hit 65p recently.

It's cheaper for me to buy books and DVD's from Amazon.uk or the US Amazon, than to buy them in Aus.

Also as there is no Aus equivalent of "Amazon" then the range of titles carried in the States and UK is far greater than we can get here.

[oldr_n_wsr]

there is no Aus equivalent of "Amazon"

Sounds like a business opportunity