New research finds significant economic impact of Chinese trade on Australian households
New research findings released by the Bankwest Curtin Economics Centre (BCEC) commissioned by the Australia China Business Council (ACBC) have quantified the economic impact of trade with China on Australian households.
Using advanced economic modelling, the research estimates Australia’s trade with China increased disposable income by a national average of $2,500 per household in the 2021/22 financial year and reached as high as $8,500 in some states and territories. This increase equates to 4.5 per cent of disposable income per capita and $26.7bn billion overall (gross) benefit to household disposable income.
The research finds that up to 569,200 jobs in Australia are supported by the country’s economic relationship with China, reducing Australia’s unemployment rate by 0.25 per cent.
Research author and BCEC Director Professor Alan Duncan said the findings bring a new perspective to the economic benefits that a trade relationship with China brings to Australia.
“Australia-China trade offers measurable benefits to the average Australian household through the channels of increased employment, higher income, and lower prices,” Professor Duncan said.
“Together, the benefits from Australia-China trade and investment are substantial for Australian households.
“This new research continues to demonstrate how substantial the trade relationship with China is for the Australian economy. China is Australia’s largest trading partner, making up around a third of its total exports and a quarter of total imports in 2022.”
The BCEC research also found the Australia-China trade relationship put downward pressure on the cost of living for Australians, estimating that Australian households would pay 4.2 per cent more for the same consumption items without China as a major import partner.
ACBC President David Olsson said that given the impact of trade on Australian households, it was imperative to maintain a strong relationship with China.
“As Australia moves to enhance its economic resilience, we often hear about the importance of market diversification. Market diversity will always be a good thing, however, what this report continues to show is that it is critical for both Australia and China that we continue to build a stronger, respectful, and meaningful relationship,” Mr Olsson said.
“We believe that a nuanced approach toward China, Chinese FDI, and Chinese technological cooperation in various sectors and value chains can continue play a crucial role in our economy’s sophistication and diversification.”
The preliminary findings of the report were officially launched at the ACBC Canberra Networking Day event held at Parliament House in Canberra on 18th October 2023, with the full report to be launched in early 2024.
For further information please contact:
Australia China Business Council
James Clarke, Chair – Thought Leadership Committee
james.clarke@acbc.com.au
+61 406 179 609
Bankwest Curtin Economics Centre (BCEC)
Joanna Holcombe, Industry Engagement Coordinator
joanna.holcombe@curtin.edu.au
+61 414 313 521
The Bankwest Curtin Economics Centre team acknowledges the Wadjuk Nyungar people as the traditional owners of the land on which the Centre is situated.