ACRI Opinion

Caution on the East China Sea

December

By Bob Carr

Note: This article appeared in The Australian Financial Review on October 16 2014.

As Australia’s Foreign Minister I had quoted several times an acute observation by Lee Kuan Yew. It was on the question of the future character of China. He said:

Zombie economics: the notion China is to blame for Australia’s property bubble refuses to die

December

Despite valiant efforts by commentators such as Bernard Keane and Michael Pascoe to slay claims that Chinese buyers are making it harder for ordinary Australians to enter the housing market, the
notion refuses to die. It is the “zombie idea” afflicting the Australia-China economic relationship.

And there is a danger the zombies will multiply. Last week the Australian Financial Review reported that China recently eased restrictions on outbound investment. The implication being “a fresh wave of capital [is] expected to make its way into the Australian property market”.

Weighing the risks for Australia as China rebalances

December

China’s leaders have been vocal in their support of a new growth model, one where consumption leads the way. Economic commentators fret about what this means for Australia.

One view is that economic pain lies ahead. As the rate of resources and energy-hungry investment in China falls, commodities such as iron ore and coal will not fetch anything like the prices they did a few years ago. Investment in the natural resources sector will dry up.

China’s workers must spend if economy is to gain steam

December

By James Laurenceson

Note: This article appeared in The Australian Financial Review on August 26 2014.

It's crunch time for China's economy. The country's long-term health requires a new model where growth is driven by consumption. The next few months should tell us whether China's leaders are able to pull it off.

Last week, we saw a snapshot of where growth driven by investment eventually leads. Overcapacity in the property sector has resulted in home prices falling in most cities for three straight months.

China trade to go beyond the boom

December

By James Laurenceson

Note: This article appeared in The Australian Financial Review on June 14 2014.

Japan has a population of 128 million, China 1.4 billion. Japan’s economy is already mature. China only entered the ranks of upper middle-income countries in 2011, and the World Bank expects that the transition to a mature, high-income economy will take at least another 15 to 20 years.