Australia fears A$3b hit from China slowdown
Australia is the world’s largest producer of iron ore, the main raw component for making steel used in building homes, railways and other infrastructure. — AFP pic
Monday, 19 Aug 2024 12:18 PM MYT
SYDNEY, Aug 19 — Australia warned today that the “softness” of China’s economy and tumbling iron ore prices could leave a multibillion-dollar hole in the nation’s budget.
Troubles in China’s massive construction sector have seen iron ore prices drop about 30 per cent since the start of the year—and the ripple effects are now being felt Down Under.
Australia is the world’s largest producer of iron ore, the main raw component for making steel used in building homes, railways and other infrastructure.
Treasurer Jim Chalmers warned the “softness in the Chinese economy” and sinking iron ore prices were reminders that Australia was “not immune from volatility and uncertainty in the global economy”.
His department now believes that the faster-than-expected fall could reduce tax receipts by around A$3 billion (RM8.9 billion) over the next three to four years.
The metal accounted for 18 per cent of Australia’s total exports last year.
The lucrative trade with a rapidly growing China has bolstered Australian mining profits and Canberra’s tax coffers for decades.
But after months of worry about China’s ailing real estate sector and excess manufacturing capacity, the price of iron ore sank by more than seven percent in the past week alone.
China posted weaker-than-expected growth in the June quarter.
The world’s largest steelmaker China’s Baowu Steel Group warned that the sector’s troubles could be longer and more severe than expected.
Australian mining firms have already taken a hit, with shares in Rio Tinto and BHP—two of the world’s biggest producers—down roughly 20 per cent since the start of the year.
Reserve Bank of Australia governor Michele Bullock told parliament last week that given the country’s dependence on China, she was watching the situation closely.
“Developments in China can have quite a big impact on the way our trade develops, and therefore on our growth,” she said.
“It’s our biggest trading partner, and it’s very important in particular for the prices of the commodities that we export, in particular iron ore.” — AFP
Monday, 19 Aug 2024 12:18 PM MYT
SYDNEY, Aug 19 — Australia warned today that the “softness” of China’s economy and tumbling iron ore prices could leave a multibillion-dollar hole in the nation’s budget.
Troubles in China’s massive construction sector have seen iron ore prices drop about 30 per cent since the start of the year—and the ripple effects are now being felt Down Under.
Australia is the world’s largest producer of iron ore, the main raw component for making steel used in building homes, railways and other infrastructure.
Treasurer Jim Chalmers warned the “softness in the Chinese economy” and sinking iron ore prices were reminders that Australia was “not immune from volatility and uncertainty in the global economy”.
His department now believes that the faster-than-expected fall could reduce tax receipts by around A$3 billion (RM8.9 billion) over the next three to four years.
The metal accounted for 18 per cent of Australia’s total exports last year.
The lucrative trade with a rapidly growing China has bolstered Australian mining profits and Canberra’s tax coffers for decades.
But after months of worry about China’s ailing real estate sector and excess manufacturing capacity, the price of iron ore sank by more than seven percent in the past week alone.
China posted weaker-than-expected growth in the June quarter.
The world’s largest steelmaker China’s Baowu Steel Group warned that the sector’s troubles could be longer and more severe than expected.
Australian mining firms have already taken a hit, with shares in Rio Tinto and BHP—two of the world’s biggest producers—down roughly 20 per cent since the start of the year.
Reserve Bank of Australia governor Michele Bullock told parliament last week that given the country’s dependence on China, she was watching the situation closely.
“Developments in China can have quite a big impact on the way our trade develops, and therefore on our growth,” she said.
“It’s our biggest trading partner, and it’s very important in particular for the prices of the commodities that we export, in particular iron ore.” — AFP
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kt comments:
Reckon Australia is still confused about China, whether she's Oz's biggest trading partner or biggest national threat?
Trade-Prosperity or QUAD-AUKUS?
Plenty of examples of history where the biggest trading partner turned into the biggest national threat.
ReplyDeleteThat's because very large trading partners sometimes develop the expectation that you must become their subordinate politically amd strategically - or else....
like the wankees :)
DeleteWakakakaka…
DeleteThis mfer doesn't know it has elegantly described the underarm trading tactics of the WASP!
Looking into history, when Manchu China was the biggest trading state of the then world, she has exercised NO strong-arm trade demands. Instead, she closed herself up to the western world, who eventually using their fire power & opium drug to pry open that closed boundary.
Following the Chinese tradition, the new China won't imitate those western inherent take-all -&-submit arrogance.
But DON'T expect an anmokausai myrmidon ever understand that behaviourism.
For the last 40+ years, Malaysia has had a cool to cold political relationship with the USA.
DeleteIt never stopped American investment in Malaysia.
Contrast that with China, which expects that if you want China investment, you must Must Kow-Tow Very low to China.
America's absolute Red Line is if a country starts killing Americans or sponsors other countries that kill Americans.
DeleteIran, Cuba...
American soldier boys/girls had been exterminated in Vietnam war, Afghanistan invasion, masqueraded mercenaries in Ukraine etc etc.
DeleteWakakakaka… those dead Yankee ain't redline as defined by u!
Walau-eh…
ReplyDelete"want China investment, you must Must Kow-Tow Very low to China"
This statement MUST be coming out from yr wettest nightmare!