Name: Nehla SiddiqueID: 28077067Tutor’s name: Anthony NiuTABLE OF CONTENTS1.The Chinese Economy2.Trade linkages between Australia and China3.Investment linkages between China and Australia4.Implications of the slowdown of Chinese economy5.Indirect Impact6.ConclusionThe Chinese Economy: IntroductionChina has been maintaining a centrally planned economy since its establishment in 1949 till the end of 1978, however the economy was reformed again when Den Xiaoping came into power again promising economic growth by the middle of 1980s. In the year 2010, China’s GDP exceeded $5trillion making it the world’s second largest economy.Over the last few years, China’s GDP (gross domestic product) has been decreasing and has been fluctuating around 6.3% in 2019, which indicates a slowdown in its economy. Having the world’s fastest growing major economy and being ranked as the second largest in the world in terms of nominal GDP, a slightest change in the country’s GDP impacts other neighboring countries as well.This essay will reflect how the slowdown in China’s economy has effected Australasia. I will first start talking about the trade and investment linkages between the two countries and then discuss the impact Chinese economy has on Australasia.Trade linkages between Australia and China:When talking about trade linkages between Australia and China, we can take exports and imports into consideration. In terms of exports and imports, China is Australia’s largesttrading partner.
FIGURE-1As shown in figure 1, in recent years (2017-2018), China has contributed $194.6b of exports and imports to Australia. Over the past decades, Australia has been exporting agricultural and mineral goods in exchange for clothes and textile (). Both the countries have also signed a free trade agreement which started up on 20 December 2015.Not only has China contributed in terms of exports and imports, it has also boosted Australia’s tourism. Myriads of Chinese tourist visit Australia every year and the rate has been increasing significantly. Almost $12 billion Chinese tourists have visited Australia in 2018, out of which 777,752 visitors came for holiday.Investment linkages between China and Australia:China has invested worldwide, Australia, Europe and USA being its major representatives. China has invested a total of $8.2 billion in 2018 and $13 billion in 2017. China’s investment in Australia is mainly composed of Healthcare (41.7%) and Real estate (36.7%) as shown in figure 2.
Figure-2China’s has invested 3436 million in Australian healthcare companies as shown in figure 3. The investment has made it easier for Australia to enter into the Chinese market and also initiate capital.