Over 1 million pilgrims benefit from golf cart service at Grand Mosque during Ramadan    Visitors welcomed with Eid initiative at Thee Ain Heritage Village in Al-Baha    Tebuk emir reviews rain response in Tayma    Saudi Arabia considers rent cap as part of major real estate reforms    Messi's bodyguard banned from touchline at Inter Miami games    Screen time in bed linked to insomnia, study finds    Le Pen vows to appeal political ban, calls verdict a 'denial of democracy'    Death toll from Myanmar earthquake rises to 2,719 as rescue efforts continue    Russia, Ukraine trade blame over new energy strikes    Putin orders Russia's largest military call-up in over a decade    Albania hosts MWL chief for Eid sermon at largest mosque in the Balkans    Haramain High-Speed Railway transports over 1.2 million passengers during Ramadan    Saudi Transport Authority says passengers can ride for free if taxi meters are off    Ministry of Education forms 425 community partnerships with SR653 million impact    Mexico bans junk food in schools to fight childhood obesity epidemic    Sweet sales surge ahead of Eid as Saudi chocolate imports top 123 million kg in 2024    Saudi creatives shine at Jeddah's Fawanees Nights with art, fashion, and storytelling    T1 CEO confirms Gumayusi's return for LCK Spring after lineup shakeup    100 Thieves claim Marvel Rivals Invitational NA crown as 2025 scene heats up    Bollywood actress vindicated over boyfriend's death after media hounding    Saudi Arabia hold Japan to goalless draw in Saitama to stay in World Cup hunt    Grand Mufti rules against posting prayers and preaching in mosques on social media    King Salman prays for peace and stability for Palestinians in Ramadan message King reaffirms Saudi Arabia's commitment to serving the Two Holy Mosques and pilgrims    Bollywood star Saif Ali Khan 'out of danger' after attack at home in Mumbai    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Australia finds fortunes tied to China
By Wayne Cole
Published in The Saudi Gazette on 20 - 08 - 2009

WE'RE all China experts now.
People everywhere are discovering the Communist superpower looming ever larger over their economic fortunes, and few so much as Australia's 22 million denizens. It was the appetite of 1.3 billion Chinese for Australia's iron ore and coal that essentially rescued the country from global recession. And that is the main reason the Reserve Bank of Australia (RBA) feels confident enough to consider raising interest rates way ahead of other developed nations.
“China has been the difference between growth and recession,” said Rory Robertson, interest rate strategist at Macquarie.
“China's dramatic stimulus effort swung that economy from bust to boom in minutes, and that allowed Australia to record the best export performance of pretty well anyone,” he added. “It also helped support Australian commodity prices at levels we could barely have hoped for just a few months ago.”
China now consumes almost 80 percent of Australia's iron ore exports by volume, up from less than 60 percent a year ago and around 20 percent at the start of the decade. China's share of coking coal exports hit 28 percent in June, up from less than one percent in 2008. In all, China took A$39 billion of Australia's goods exports in the year to June, up 45 percent on the previous year.
Central bank assistant governor Phillip Lowe last week was moved enough to call that performance “truly remarkable”.
Chinese demand, he said, was the main reason Australian export volumes rose between three and four percent in the past nine months, when every other developed nation saw exports slide, some by 20 to 30 percent.
His boss, Governor Glenn Stevens, was just as effusive.
“Sceptics about the growth of China so far, I think, may have underestimated the determination of Chinese policymakers to grow their economy and I doubt that determination has lessened,” he told lawmakers.
And this relationship is only set to get closer as China looks to secure its future energy and resource needs. On Tuesday, the two countries struck their biggest trade deal ever, a A$50 billion project to supply liqueified natural gas to China.
Trumpeting the deal in Parliament, Treasurer Wayne Swan said the government would reap a tax bonanza worth around A$40 billion from the entire Gorgon gas project in the next 20 to 30 years.
Driving the Aussie
One result is that all things China are becoming a major driver of the Australian dollar, with markets hyper-sensitive to any change in Chinese demand, real or imagined.
In July, a routine report that one iron ore shipment from Australia had been cancelled by the Chinese client while at sea, sent the local dollar sliding two US cents.
It quickly became clear this was a one-off event and Chinese demand for Australian iron ore was only getting stronger, but the message was not lost on currency traders who now watch all and any news on iron ore like hawks. Investors are also becoming increasingly sensitive to swings in the Shanghai share market (SSEC).
When the index slid early this week, currencies leveraged to global growth such as the Aussie and New Zealand dollars, slid while safe havens such as the yen and US dollar jumped. This linkage is not entirely welcomed by analysts given how wild the Shanghai index can be, when compared to old favourites such as the S&P 500.
“Historical volatility in the Shanghai index is substantially higher than the S&P and at times directionally seems to be dependent on Beijing directives that, to put it politely, are far from transparent from a distance,” said Alan Ruskin, an international strategist at RBS.
“We have been warned -- this is the very start of a much longer-term trend where Chinese equities will act as an additional variable and a counterweight to take notice of, especially when the signal contradicts that of the S&P.”
Sinologists
Markets across Asia now hold their breath for Chinese data, much as they once did for Japan's. That can be a painful process as it is not always clear when the data will be released.
Pretty much all of July's major indicators were released on one day last week, led by industrial production. The 10.8 percent rise in output seemed impressive enough, but it still fell short of the 11.7 percent tipped by analysts and the Australian dollar promptly sold off sharply.
Analysts at HSBC reckon that electricity production is the most reliable measure of the Chinese economy and note that, when charted, the Australian dollar has tracked eerily close to output in the last couple of years.


Clic here to read the story from its source.