China's Fiscal Stimulus and the Recession Australia Never Had: Is a Growth Slowdown Now Inevitable?

China's timely and well-targeted two-year fiscal stimulus was particularly effective in stimulating growth in Australia's commodity exports. Using a constructed series of export volumes to China, this paper finds that the post-stimulus GDP growth contribution from export volumes to China is significant. Had growth in export volumes to China been commensurate with pre-stimulus rates, Australia would have experienced three consecutive quarters of negative real GDP growth — a technical recession. China's gradual and uniquely revenue-based unwinding of fiscal stimulus reduces the risk to Australia of an imminent growth slowdown.