Australia's Linkages with China: Prospects and Ramifications of China's Economic Transition

May 22, 2018

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Format: Chicago

Philippe D Karam, and Dirk V Muir. Australia's Linkages with China: Prospects and Ramifications of China's Economic Transition, (USA: International Monetary Fund, 2018) accessed September 19, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

China and Australia have increasingly strong links, especially through trade. These are driven by demand from China for Australian commodities (coal and iron ore) and services (tourism and education). These links are influenced by China’s transition to a services-driven, consumer-led economy. Using ANZIMF, the Australia-New Zealand Integrated Monetary and Fiscal model, three risks (both upside and downside) to China during this transition process are considered, focusing on their spillovers to Australia. One simple takeaway is central to each risk – while the real GDP response to shocks in Australia typically is small, responses in demand components or sectors are usually much larger– along with three further takeaways, all of which help in the analysis of Australia in relation to any risk emanating from China.

Subject: Commodities, Commodity prices, Consumption, Exports, International trade, National accounts, Prices, Service exports

Keywords: Asia and Pacific, Australia, Australia-China linkage, Australia-New Zealand, China, China-Australia relationship, Commodity, Commodity exporter, Commodity prices, Consumption, Downside scenario, Dynamic stochastic general equilibrium, Export, Export-led growth, Exports, Exports fall, Global, Household sector, Open economy macoeconomics, Open economy simulation, Price, Service exports, Small open economy, Transition path, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/119
Stock No:

WPIEA2018119
ISBN:

9781484357200
ISSN:

1018-5941

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