Economics

By James Laurenceson

Note: This article originally appeared in the Lowy Interpreter, July 28 2016.

The lights are still on in Manila.

That must come as quite a surprise to defence hawks who like to beat the drum that the sale of New South Wales electricity distributor Ausgrid to a Chinese company could compromise our national security and be contrary to the national interest.

This paper begins by showing that even after conditioning for factors that might justifiably lead to a country having relatively high leverage, China remains a debt outlier. In this sense China can be regarded as over-leveraged and its debt may present a potential risk to growth and financial stability. The corporate sector is central to China’s debt story, accounting for two-thirds of the total. The corporate sector has also been mostly responsible for China’s leverage cycles, including the leveraging up since 2008 and an earlier deleveraging phase starting in 2003.

1. In 2015 the value of Australia’s goods and services exports to the UK stood at $8.8bn and $23.5bn to the EU as a whole. This compares with $91.3bn to China.[1]

2. Over the past decade the value of Australia’s goods and services exports to the UK fell by $0.6bn, while they increased by $0.4bn to the EU as a whole. This compares with an increase of $71.1bn to China.[2]

By James Laurenceson

Note: This article originally appeared in the Australian Financial Review, June 9 2016.

Remember those claims from some trade unions last year that the China-Australia Free Trade Agreement (ChAFTA) would allow Chinese companies to bring in their own workers?

1. The annual value of Queensland’s goods exports to China is $11.6 billion.[1],[2] This compares with –

- $8.1 billion to Japan

- $6.0 billion to Korea

- $5.3 billion to India

2. The annual value of Queensland’s goods exports to China has increased by $4.9 billion over the past five years.[3] Exports to –

- Japan fell by $3.2 billion

- Korea increased by $0.1 billion

Few have the insight into the Chinese economy of Dr Guonan Ma. Educated in China and the US, Dr Ma is currently a Visiting Fellow at the Australia-China Relations Institute at UTS and a non-resident scholar at Bruegel, an economic think tank based in Belgium. Dr Ma served as senior economist at the Representative Office for Asia and the Pacific of the Bank for International Settlements for 14 years. Prior to this he was Chief North Asia Economist for investment banks Merrill Lynch, Citigroup and Bankers Trust.

By Hannah Bretherton

This article originally appeared in ASPI's The Strategist

By James Laurenceson

Note: This article originally appeared in the Higher View Business magazine, April 2016.

Pick up any major Australian newspaper these days and the business section is sure to be filled with coverage of the latest economic developments in China.

Australia’s fixation with China is justified. 

In 2014-15, Australia’s bilateral trade with China stood at $A149.8bn. That’s more than double the value of trade with Japan, Australia’s second-largest trading partner.

Defence hawks have cited the Northern Territory Government’s decision to lease Port of Darwin to Shandong Landbridge Group in 2015 as reason to call for changes in Australia’s foreign investment approvals regime that would restrict Chinese investment in critical infrastructure assets on security grounds. They have also claimed the support of public opinion. This paper begins by reviewing the security debate around the Darwin Port sale and highlights that the alleged risks raised by critics of the deal have been downplayed by academic experts and leading defence and intelligence figures.

On April 5 2016 the Australia-China Relations Institute (ACRI), in partnership with the Institute for Sustainable Futures (ISF) at UTS, hosted climate and energy policy expert Dr Wang Tao, Assistant Dean of CBN Research Institute and nonresident scholar of Carnegie-Tsinghua Center for Global Policy, for a special look at China's transitioning energy policy and how it fits into the 'new normal' economy.