China's shift to consumption-led growth reflected in Australia
China’s switch to consumption-led growth is intensifying and helping to boost industries in Australia with new opportunities in food, tourism and education services.
Australian data show that China’s transition to consumption-led growth is intensifying and helping to boost non-resources industries Down Under at a crucial time for both economies. At the same time, Australia is emerging from a China-fueled mining boom and seeking new opportunities to provide food, services and health products to its biggest trading partner.
“Australian exports provide clear signs that middle-class incomes are continuing to gain and preferences are shifting in China toward services and higher-quality food products,” said Paul Bloxham, chief Australia economist at HSBC Holdings Plc. “The time-frame for China’s transition is large, a decade or more, and it won’t be easy. But the fact it is already underway is positive.”
China is seeking to encourage consumption following the nation’s rapid industrialization. The shift is critical to boost productivity as China seeks to avoid a middle-income trap and regain its place as the world’s top economic power.
In the restaurants of Beijing and Shanghai, patrons are ordering more Australian beef. While earnings from Australian meat, which totaled A$15 billion last year, aren’t about to eclipse iron ore, the surge in beef sales signals Chinese demand is aiding the transition away from mining, as wealthier diners opt for higher quality food.
Australia had 1 million Chinese visitors last year, a record, as newly cashed up mainlanders take to the world. And it is mainlanders: their numbers are rocketing and set to surpass visitors from Hong Kong in the near future. At the same time, the tourism revival has exposed one of the legacies of Australia’s mining boom as investment in new tourist infrastructure on the east coast lags behind.
Chinese students are flocking to Australian universities in record numbers, reflecting the Asian behemoth’s growing wealth. The appeal of Australia, outside its similar timezone, clean environment and weakened currency, is a pathway to residency. Foreign students educated Down Under may eventually obtain citizenship and, in turn, bring their parents to join them under the family reunion program.
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