Here's a piece in The Economist: Australia has weathered the China slowdown and commodities slump well.
(It may be gated)
The article takes a look back at Australian policy that's kept the country out of recession for 25 years.
Moving forward to today the piece notes:
- Commodity exports have continued to grow
- Prices of iron ore and coal are well below the past decade's peaks, they remain above pre-boom levels
- Australia let the dollar depreciate
- Australia benefits from a growing number of Chinese consumers
- Today education and tourism together account for 14% of Australia's export value
- According to Paul Bloxham, the chief Australia and New Zealand economist at HSBC, Australian builders completed almost 200,000 new dwellings last year, and will probably do the same this year and next
It is not all sunshine and lollipops, though:
- Australia remains overexposed to the fortunes of China
- Notes an alarming rise in house prices
- If prices collapse, that could not just harm Australia's otherwise healthy banks, but also dampen domestic consumption for years
- Some argue that government debt, which has hit a record 36.8% of GDP, up from a low of 9.7% in 2007, is another worry (It remains lower than in most developed countries)
- But given the risks of a housing bust or deeper slowdown in China, such worries reflect a healthy lack of complacency
(ps. There's plenty of sunshine and lollipops to go around :-D )
