China set to top US for imports (to Australia)
By Tim Colebatch
Economics Editor
Canberra
September 30, 2004
China is about to overtake the United States as Australia's biggest import supplier, as the nation ran up its 21st consecutive billion-dollar trade deficit in August.
The Bureau of Statistics said yesterday the monthly trade deficit after seasonal adjustment returned to $1.9 billion, roughly the average of recent months, after blowing out to $2.7 billion in July.
Exports fell for the second month in a row, but imports declined much more, slumping 5 per cent as no large aircraft were imported in August and consumer imports declined for the second month in a row.
In Washington, the International Monetary Fund forecast that Australia's annual growth would decline slightly during the coming year, hitting 3.4 per cent in 2005 compared with 4.1 per cent in the year to June. But it again warned that more interest rate rises might be needed.
The IMF predicted the world economy would grow more this year than it had for almost 30 years, with output surging 5 per cent thanks to massive fiscal and monetary stimulus in the West and massive industrial growth in China and India.
While warning that continued high oil prices could derail the boom, the IMF predicted that global growth would remain a solid 4.3 per cent during 2005.
But it said the threat of terrorist attacks and a record low level of spare production capacity would keep oil prices volatile.
The IMF estimates that China has now taken over from the United States as the biggest source of world growth. And yesterday's figures show China is also about to replace the US as the main single source of Australia's imports.
Including Hong Kong, through which many of its exports are shipped, China sold $3.5 billion worth of goods to Australia in the first two months of 2004-05, just behind the US with $3.6 billion.
But imports from China have grown 31 per cent in the past year, whereas imports from the United States have grown just 2 per cent.
Australia's annual trade deficit edged up to a record $24 billion in the year to August. In July and August, exports rose 16 per cent from a year earlier and imports rose 15 per cent.
Most of the export growth came from the mineral sector, in which soaring commodity prices and rising volumes have lifted coal export revenue by 46 per cent, mineral ores by 26 per cent and processed metals by 17 per cent.
Rural exports have also jumped 36 per cent, with exports of wheat and other cereals more than doubling and meat, wool and dairy exports all up strongly. But exports of manufactures have slumped 2 per cent, with big falls in exports of computer parts, cars and other transport equipment.
- with AAP
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