Australia appears to be quite vulnerable on exports front
letter published in The Australian, 10 Oct 2008
Rowan Callick reports the positive views of those closely involved with Australian exports to China ("China to grow but cut prices" 9/10). But while it seems a reasonable assumption that Chinese demand will continue to grow, albeit at a slower rate, it is important to keep this in perspective.
In 2007-08 Japan remained easily our biggest export market (for goods) and that remained the case in the latest two months' published data (about 22 per cent of total exports compared with 15 per cent going to China). The global financial, and now increasingly economic, crisis suggests that even further growth in exports to China may not be sufficient to offset the likely slowing in exports to Japan and other countries over the next year or so.
Also relevant is the relative importance of exports in Australia's national income, now running at over $1,100 billion per annum. In 2007-08 exports of goods (in current prices) increased by about $13 billion or about 7.5 per cent and constituted about 17 per cent of national income (of which exports to China were about 2.5 per cent). In the period ahead we may be fortunate to hold our total exports of goods steady.
Des Moore
South Yarra Vic