Australia to cash in on China's economic growth

Despite the economic slowdown, China's economic expansion plan for the 2011-15 period and its increasingly surging demand for commodities such as iron ore and coal will continue to spur growth in Australia, China's top envoy to Australia said.

The economic slowdown could "affect China's demand for mineral goods in the short term, but from a long-term perspective, it is unnecessary for us to worry about the Chinese economy and its demand or to hold any doubts about the closer bilateral economic and trade relations between China and Australia," said Chen Yuming, China's ambassador to the resource-rich nation.

"China will continue to be the growth engine of the Australian and global economies in the next five years," he said.

The global financial crisis and eurozone debt woes have taken a toll on developed economies. The United States, with a stubbornly high unemployment rate, has launched its third round of quantitative easing, also called QE3.

Unlike previous programs, the third round has no defined limit and will continue until the labor market improves.

And while many European countries, especially Greece and Spain, face mounting debt problems, the European Central Bank recently sent its strongest signal that it will use unlimited monetary resources to save the euro.

"Australia is the only OECD nation that has not been affected by the global financial fluctuation and has led growth among developed nations since 2008," Chen said.

The Organization for Economic Co-operation and Development comprises 34 member nations, including the US, Japan and much of Europe.

Australia's good performance "should be attributed to China, its fast economic growth and the huge demand for commodities and resources", he added.

The Australian economy grew 3.7 percent in the second quarter of this year, and the nation is expected to surpass Spain this year as the world's 12th-largest economy.

"China and Australia are increasingly reliant on each other. Both need each other so much," Chen said.

This year marks the 40th anniversary of the establishment of diplomatic relations between the two countries. "China and Australia should respect and trust each other and deepen understanding about each other, joining hands to enhance the cooperation," Chen said.

According to Chen Gong, president of Anbound Group, a leading Chinese consultancy, the effect of China's slowing economic growth will be "short-lived", and bilateral economic relations will "unavoidably get closer and closer."

In 2007, China surpassed Japan as Australia's largest trading partner. China is the largest destination for Australian exports, and the largest source of Australian imports. Australia is China's eighth-largest trading partner.

Not only does Australia's resources sector and its economy depend on China, the fortunes of Australia's tourism industry also rest on Chinese visitors.

In May, the number of tourist arrivals from China hit 50,000, an increase of 17 percent year-on-year, according to the Australian Bureau of Statistics.

Deloitte Access Economics estimates that Chinese tourists, who accounted for 2.4 percent of all visitors to Australia in 2004, will make up 13.3 percent of the market by 2014.

Chen said that despite the positive and upward trend of bilateral trade, the two nations should accelerate "diversifying" the trade structure from largely centering on mineral goods.

"Bilateral trade exchanges could expand into a wider range of goods and services in agriculture, technology, education, culture and tourism," he said.

"And also, the two need to expand two-way investment."