China's growth, job creation impressive, Australia will benefit

With China's Two Sessions coming to a close, a leading economist in Australia said here on Thursday that the future looks bright for the economic partnership between China and Australia.
Professor James Laurenceson, economist and deputy director of the Australia-China Relations Institute (ACRI) at the University of Sydney, sat down with Xinhua on Thursday and outlined the reasons why he believes that the economic relationship between the two nations was further solidified by the strategies outlined in the annual sessions of China's top legislative body and top political advisory body.
Laurenceson noticed the Two Sessions set this year's GDP growth target at 6.5 percent, and was certain it will benefit Australia immensely in the year of 2017.
"We have seen what 6.7 percent got us (Australia) last year. Mining exports were up by 12 percent to China. Our services exports rose by 21 percent," Laurenceson said.
The economist reminded that although the 6.5 percent target was a bit lower than last year's growth, as the economy is larger than what it was last year, even a 6.5-percent increase would be the equivalent of 6.7 percent in 2016.
He believes that even if China were to only achieve the lower floor of growth, that would be impressive in itself and beneficial to the Australian economy.
"If in a year's time Australia's services exports are still growing at double digit rates, our agricultural exports are growing, our mining exports are growing -- that's a pretty good story for Australia," Laurenceson said.
The shift toward the reform on the supply-side economy has been seen in China in recent years, and that focus was reiterated during the sessions, with domestic consumption, according to Laurenceson, being crucial for "sustainable" growth.
"You can get a short term boost in China through investment, but it is really consumption that is going to drive your economy in the long run," he said.
"It went well last year, two thirds of China's growth last year came from consumption, if China can continue that in 2017, it's not only a good story for China, it's a good story for Australia and the global economy."
Some Australian commentators used to voice concern in the past years that China's emphasis on domestic consumption would lead to less demand for Australian commodities. However, Laurenceson said this quite simply was not the case.
"The truth is, China is buying more of our minerals and energy exports than ever before, and at the same time, now the middle-class Chinese, the rise of the middle-class in China, they are also demanding our agricultural goods and our services," Laurenceson said.
"We have actually seen a strengthening and a broadening of the Australia-China relationship over the past few years, rather than any lessening of importance."
The reform on consumption-driven growth in China led to 13.14 million new urban jobs, along with 12.4 million people across the country being lifted out of poverty. With this year's target set at 11 million new jobs, Laurenceson is hopeful this can be achieved, but admits it is a significant challenge.
The strong relationship between China and Australia can be reflected on the same attitude toward globalization and free trade despite the growing threat of protectionism in some countries, the economist said.
"Australia is absolutely delighted that China is continuing this narrative that it will remain open to free trade and investment. An open global economy," Laurenceson said.
"Australia and China are leading in this area, while some other areas of the world are probably slipping behind."
Laurenceson was hopeful that the Belt and Road Initiative will not only lead to better global economic outcomes, but also have a direct positive impact on the economic partnership of Australia and China.
"Last month there was a meeting between our Foreign Minister Julie Bishop and Chinese Foreign Minister Wang Yi, and they discussed this point exactly, and said there was a great opportunity to link the Australian government's plan to develop northern Australia with the Belt and Road Initiative," he said.
"Australia now has lots of Chinese investors moving into agricultural production in a part of Australia where there is vast land but has often lacked irrigation."
"The Australian government and Chinese investors are teaming up to solve that problem, and it's a very good example of the Belt and Road Initiative in action, in Australia, to the benefit of both countries," Laurenceson said.