Why China continues to be important to the Illawarra economy

The importance of China to the future of the Australian and Illawarra economy was highlighted at an Illawarra Innovation Industry Network (i3net) breakfast on Friday.

Commonwealth Bank’s Richard Robertson said jobs were important to any economy and the NSW jobs market is presently outperforming other states. And as of two weeks ago Australia had enjoyed the longest run of economic growth of any industrialised nation. But China will play an important part of our future growth.

Mr Robertson said he had heard how i3net was an influential group in the region and that was good because “industry, manufacturing, engineering and IT are so important”.

China, which is growing at more than 6.1 per cent, continues to provide a large portion of Australia’s export incomes and the outlook remains favourable.

India is also still growing well and Australia still has what both nations want. It is also well located geographically near countries that represent 40 per cent of global tourism growth, 65 per cent of the world student pool, 55 per cent of the world’s population and 55 per cent of the growth in the world’s economy.

“Australia really is the lucky country because we are in this circle. Being here in this part of the world is good for us,” Mr Robertson said.

“China is already bigger than the Euro Zone. And in the next four or five years they will overtake the US as the world’s largest economy”.

That will continue to open up new opportunities such as suggested recently by one Commonwealth Bank regional economist who said “we have had the mining boom, now get ready for the dining boom.”

Mr Robertson said “China is becoming a demand driven economy now. It is not as much export led. They want what Australia has. They want good quality food, wine and beef. And they will still use a lot of our mining resources”.

But what really captured the attention of i3net members were comments about China thinking big and investing in large infrastructure projects to help sustain its consistent national economic growth. One is a massive $1.3 trillion project that involves the construction of a silk road by land from China to London. “This is one of the largest infrastructure projects ever undertaken. It has started and one of the key take-outs of this is that going from Beijing to London presently takes 15 days overland. That is going to be brought down to two days. This network will help link up 70 per cent of the world’s population. It is going to be one way that China really becomes a dominant super power in the world. Not through military but through trade.”

Mr Robertson said the good news for Australia and the Illawarra was we have the resources that can help build it. Tourism also remains important. “Last year we had one million visitors from China. When they come they spend more money than almost any other country. And the Chinese Government is making it easier for more people to come to Australia.”