TPT November 2009

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N ovember 2009 83 ›
to the same degree as their counterparts in the US and the UK.
Canberra was able to extend guarantees to various parts of the
financial system, as required, at relatively low cost. As a result,
in comparative terms Australia has remained “surprisingly strong”
during the global economic crisis.
This analysis, by the strategic-consulting firm Oxford Analytica, is
supported by Reserve Bank of Australia (RBA) forecasts for gross
domestic product growth. If these prove accurate, Australia will have
regained its average real growth rate of 3% to 3.5% by the end of
2010. The RBA now foresees a gradual pick-up in growth, led by
government infrastructure spending, housing construction, and a
modest rise in exports. Just a quarter-year before, Oxford Analytica
noted, the central bank was expecting a contraction over the course
of 2009. (“Australia’s Economic Forecast,” 12 August)
A major factor in Australia’s good fortune is, of course, the
plenitude of its natural resources, notably iron and aluminium ore
and concentrates, and crude petroleum. The sharp fall in Chinese
exports has not affected demand for these raw materials as China’s
fiscal stimulus – focused on infrastructure – is heavily reliant on
Australia as supplier. Although Australian export prices are down
from the 2008 peaks, merchandise export volumes rose in the nine
months through June.
Any retailer knows that reliance on a single free-spending
customer can be a risky business. And, over the past two years,
China’s share of Australia’s merchandise exports has risen from
15% to 20%. Oxford Analytica, which draws on a network of
scholar-experts worldwide, noted that this increasing dependence
on China “exposes [Australian] policy to new pressures, requiring
skilful management.”
One of these pressures was in fact brand-new. On the day before
“Australia’s Economic Forecast” was published, the Chinese news
agency Xinhua reported that prosecutors in China had approved the
formal arrest of four employees of the British-Australian mining giant
Rio Tinto Ltd on charges of bribery and infringing trade secrets.
Among the four, who were detained since 5 July on indeterminate
grounds, is an Australian citizen and Rio Tinto general manager, of
Chinese descent, who led the company’s multibillion-dollar mineral
sales business in China.
Whether the matter will yield to skilful management is yet to be
seen. As of this writing it remains unresolved.
Global manufacturers face a scarcity of
rare earth elements as China moves to
limit their availability
China is not entirely dependent on Australia, or any other supplier,
for raw materials. In several of the world’s most obscure but
valuable minerals she is self-sufficient, and very much more. China
currently accounts for 93% of production of so-called rare earth
elements; and over 99% of the output of dysprosium and terbium,
elements vital for a wide range of
green-energy technologies and
military applications.
Now signs are strong
that China is building up
its already considerable
presence in the market
for exotic minerals. Keith
Bradsher, chief Hong
Kong correspondent of
the International Herald
Tribune, reported that, in
Australia
has avoided
worst of the
recession