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Chinese Rebalancing and Australian Exports

Author

Listed:
  • Gerard Kelly

    (Reserve Bank of Australia)

Abstract

The Chinese authorities plan to gradually rebalance the composition of Chinese economic growth from investment towards household consumption. This article uses the World Input-Output Database (WIOD) to give a general sense of how this rebalancing might affect Australian exports and economic activity. Dollar for dollar, Chinese investment appears to absorb more than twice as much Australian value-added output as Chinese household consumption. This largely reflects the significant role of resource commodities in Australia’s exports to China, which are used more intensively in investment than consumption. Simple analysis using the WIOD suggests that a shift from investment to consumption in China is likely to weigh on the growth of demand for Australia’s mineral resources, although a rise in demand by Chinese households for food products and services could provide some offset.

Suggested Citation

  • Gerard Kelly, 2014. "Chinese Rebalancing and Australian Exports," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 23-30, December.
    • Handle: RePEc:rba:rbabul:dec2014-04
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    File URL: https://www.rba.gov.au/publications/bulletin/2014/dec/pdf/bu-1214-4.pdf
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    References listed on IDEAS

    as
    1. Vanessa Rayner & James Bishop, 2013. "Industry Dimensions of the Resource Boom: An Input-Output Analysis," RBA Research Discussion Papers rdp2013-02, Reserve Bank of Australia.
    2. Leon Berkelmans & Hao Wang, 2012. "Chinese Urban Residential Construction," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 21-26, September.
    3. Gerard Kelly & Gianni La Cava, 2014. "International Trade Costs, Global Supply Chains and Value-added Trade in Australia," RBA Research Discussion Papers rdp2014-07, Reserve Bank of Australia.
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    Cited by:

    1. Simola, Heli, 2015. "Rebalancing of demand in China: Illustrating possible effects with an input-output analysis," BOFIT Policy Briefs 9/2015, Bank of Finland Institute for Emerging Economies (BOFIT).
    2. Tanweer Akram & Anupam Das, 2020. "Australian Government Bonds’ Nominal Yields: A Keynesian Perspective," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 1-20, March.
    3. Kate Stratford & Arianna Cowling, 2016. "Chinese Household Income, Consumption and Savings," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 31-40, September.
    4. Guonan Ma & Ivan Roberts & Gerard Kelly, 2016. "A Rebalancing Chinese Economy: Challenges and International Implications," RBA Annual Conference Volume (Discontinued), in: Iris Day & John Simon (ed.),Structural Change in China: Implications for Australia and the World, Reserve Bank of Australia.
    5. Tanweer Akram & Anupam Das, 2018. "Australian Government Bonds' Nominal Yields: An Empirical Analysis," Economics Working Paper Archive wp_910, Levy Economics Institute.

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