August 21, 2007
For Australia, China is now a more significant trading partner than Japan
For the past 36 years, Japan has retained the mantle of Australia’s largest trading partner. Now that mantle is held by mainland China.
In mid-2004, China was Australia’s third largest trading partner behind Japan and the US.
But the massive growth of the Chinese economy since that time has seen its demand for resources soar together with its output of inexpensive, high quality manufactured goods. In just three years Australia-China trade has doubled.
---The Australian
This is obviously a sign of the times. For decades, Japan was the undisputed commercial powerhouse of Asia (with the “little dragon” economies -- Hong Kong, Singapore, South Korea, and Taiwan --- distantly bringing up the rear.) Today, when Westerners think of economic power in Asia, China comes to mind more often than Japan.
The key question, however, is when and if China will become as significant as a customer as it currently is an exporter. As the above cited article acknowledges:
"While Japan remains our the biggest customer for Australia’s exports it has been eclipsed in two-way trade...."
Australia, like the United States, has a massive trade deficit with China. And Australia----also like the United States--- suffers from a massive net imbalance of trade. The article reports that Australia has had a trade deficit for the past 64 years.