The Abacus

China remains the greatest opportunity

By: The Australian
21-08-2017

Every nation tells itself stories about the world and how it works. Sometimes these stories are helpful, but sometimes they can blind us to the new opportunities generated by change.

Many of the stories written about China over the past few years have fallen into the harmful, rather than helpful, category. These stories can be summed up in two words: slowdown and suspicion.

Hardly a day goes by without a reference in the Australian media to China’s economic “slowdown”. It’s worth putting a few things in perspective: while China’s growth is indeed slowing from the unprecedented double-digit highs of the last few decades, it still expects to grow by around 6.5 per cent each year through to 2020. China’s economy has now reached a size where a percentage point of growth today is worth more than two percentage points a decade ago.

The latest figures show that over the past year China’s economy grew at an impressive 6.9 per cent. “Slowdown” is a very strange term to use about an economy that is growing at more than double the rate of most of the rest of the world, and which is generating about 40 per cent of the world’s economic growth.

Alongside the narrative of “slowdown” comes that of “suspicion”. Talk of Chinese investors buying up the farm and worries about China’s strategic objectives can blind us to the enormous potential that lies in raising the still extremely low levels of Chinese investment in Australia.

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