Economics

By Bob Carr

Note: This article appeared in The Sydney Morning Herald on July 27 2017.

Behind China’s recent 6.9 percent growth in GDP lies a bigger fact: between 2009 and 2030, the country will add 850 million to its middle class. I would call that a killer fact.

1. Over the past year the value of NSW goods exports to China is $7.0 billion. This is a record high.  China accounts for 16.7 percent of NSW total goods exports, and is:

- 0.7 times that to Japan;

- 2.1 times that to Korea; and

- 2.8 times that to the US.[1]

2. The annual value of NSW goods exports to China increased by $1.3 billion in the past five years.  During the same period NSW goods exports to:

- Japan fell by $448.3 million;

- Korea fell by $451.8 million; and

In a 12 month period between December 2014 and December 2015, Australia clinched free trade agreements (FTAs) with Korea (KAFTA, enacted December 12 2014), Japan (JAEPA, enacted January 15 2015) and China (ChAFTA, enacted December 20 2015). A decade earlier, Australia had sealed an FTA with the US (AUSFTA, enacted January 1 2005). The combination means that Australia now has FTAs with its four biggest overseas customers.

Senior economists, policy specialists, business representatives and diplomats from Australia and China gathered in Beijing for the inaugural Australia-China Think Tank Annual Economic Dialogue, co-hosted by the Australia-China Relations Institute (ACRI) and the Chinese Academy of International Trade and Economic Cooperation (CAITEC).

The Australian gas sector is at a dynamic stage due to Australia’s expected ascension to the world’s largest LNG exporter by next year. The increasing export of LNG, at a time of expiring long-term contracts in the domestic market, causes debate on the high price for domestic consumers. There is no quick solution to balancing various interests. Changes to existing commercial arrangements through legislation and state intervention may be a quick solution to mitigate domestic market price pressure, but maynot be in the nation’s long-term interest.

By James Laurenceson

Note: This article appeared in East Asia Forum on June 4 2017.

The oil indexed pricing mechanisms for natural gas and LNG in Asian markets, although successful until the 1990s, are general considered to be no longer appropriate, with a weak relationship between oil and gas market fundamentals. Since the current oil-indexed pricing system fails to reflect the natural gas market fundamentals, several East Asian countries including China are considering formulating their own natural gas benchmark prices.

By James Laurenceson

This article appeared in The Australian Financial Review, April 19 2017.

Between 2011–2015, China and India accounted for an average of 35.5 percent and 11.9 percent of world GDP growth, respectively.[1]

In 2015-16 China was the number one customer for Australia’s goods worth $75.3 billion, accounting for 30.9 percent of total Australian goods exports. India bought $9.7 billion and ranked fifth, accounting for four percent of the total.[2]

Public calls for a more aggressive regional response to China’s pressing of its territorial claims in the South China Sea are typically couched in terms of the threat posed to freedom of navigation. Yet this invites an obvious question: If freedom of navigation, a vital interest for nearly every country in the region, is at risk, why has the regional response to China’s actions to date been so limited? This article argues that one compelling explanation lies in the economics of freedom of navigation in East Asia.