AUSTRALIA'S economic relationship with China is not yet a reciprocal one and needs considerably more attention -- including by government to follow up new arrangements agreed during Julia Gillard's recent visit -- if it is to broaden beyond today's resources focus.Of course, many nations are currently trying to become trade partners with China, as they have a large and quickly growing economy. Australia currently isn't on particularly great terms.
We've been talking in class about exports, imports and tourism, and this relates. If Australia cannot form a more beneficial partnership with China, they will increase their trade deficit further by continuing to import more from China than they currently export.
As far as fixing this situation, people aren't sure - China still has a strong comparative advantage when it comes to manufacturing goods, though Chinese workers are demanding higher wages as of late, so that may end sometime in the near future.
What is good news for Australia is that exports may be increased due to tourism, as tourism is included in the exports category. The Chinese market for tourism brings in around $3 billion a year for Australia and is expected to grow substantially over the next ten years as GDP/capita increases in China. Even if Australia cannot generate a better position trading with China, tourism may be what saves them.
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