Resources, Energy and Tourism

The past three decades has witnessed the re-emergence of China as one of the world's largest economies. This change has been dramatic such that by 2010, measured on purchasing power parity, China became the world's second-largest economy after the United States. China's GDP in 2011 was 46 times higher than it was in 1980 and accounted for about 14 per cent of global GDP. By comparison, the United States' GDP in 2011 represented about 19 per cent of world GDP, while Australia's share was 1.2 per cent. Along with China's own economic transformation there has been a structural shift in its trading relationship with Australia. China has become Australia's most important trading partner and is both our largest export destination and the largest source of our imports in value terms. The change in the Australian-China trading relationship is most visible in terms of resources, energy and tourism. The real value of Australian exports of mineral resources to China increased from A$0.2 billion (in $2010-11) in 1989-90 to A$49.9 billion in 2010-11. In volume terms, China accounted for around 69 per cent of Australian total exports of iron ore in 2010-11, compared to around six per cent in 1989-90. Over the period 1989-90 to 2010-11, China's share of Australian total exports of metallurgical coal increased from one per cent to around 11 per cent, while its share of Australian thermal coal increased from 0.1 per cent to around 12 per cent. From a low base in the mid-1990s, the Chinese tourism market has grown to be Australia's most important market by value worth A$3.5 billion in export value, and the third largest inbound market by visitor arrivals, with 542 000 arrivals in 2011. By 2020-21, it is projected that Chinese arrivals in Australia could grow to over one million visitors with a total inbound economic value of A$6.9 billion. Given the importance of China to Australia, especially in terms of my portfolio responsibilities, I am very pleased that the Bureau of Resources and Energy Economics (BREE) and Tourism Research Australia (TRA) have collaborated to produce Resources, Energy and Tourism China Review. In this, the inaugural issue, there is a valuable overview of China's economic re-emergence and its economic relations with Australia. There are also three review articles. These include: a 'By Invitation' article on China's demographic transition provided by two Chinese scholars; a review of the Chinese gas market; and a review of China's demand for tourism and prospects for the future. In addition, this issue includes a unique collection of statistical tables, figures, charts and comparisons to illustrate the 'China story' and China's economic relations with Australia and also the rest of the world.