Australia enjoys China-fuelled boom
- 16 January 2012
- From the section Business
At an Australian house auction, it does not take long for the numbers to reach and then pass seven figures.
Edwin Montoya does not know this yet, but he is just about to experience this bizarrely compelling phenomenon first hand.
Part business transaction, part theatre, an auction is where the strong stick to their budgets and the weak succumb to their underfunded impulses.
Edwin has his eye on a neat, architect-designed bungalow in Sydney's Western suburbs and decides it is the one for him.
So, in the back garden with its parquet flooring-styled pavements, he joins battle with four other suitors for this comfortable, but less-than-grand, dwelling.
'Concerned about the future'
The auctioneer rattles off the dollars quicker than the Australian Mint could print them.
But Mr Montoya soon has the psychological upper hand, seeing off two early contenders, whose combined loss of nerve and even more diminutive chequebooks are unable to stand the pace.
That leaves Mr Montoya standing opposite an elderly man, for whom a million dollars looks like it could be the loose change trapped amid the fluff in the far recesses of his wallet.
But, Mr Montoya prevails and for A$1.1m (US$1.1m; £740,000) the hammer goes down in his favour.
Yet he is not entirely happy, his joy tempered with the current Australian predilection for restraint and pragmatism.
"I'm glad I won the auction," he says.
"But I'm concerned about the future. How long will Australia's prosperity last? How long will China and India continue to buy our minerals?"
Mr Montoya's perceptive answer hits a box full of nails on the head.
Not only is he himself half Chinese, half Australian. He also knows well that China's road to riches is Australia's path to prosperity.
Without China, Australia would have a journeyman economy and find itself a fully paid-up member of the global hardship club, most probably unable to pay its subscription dues.
Instead, thanks to China, the vast country enjoys a dazzling, recession-beating, envy-generating period of economic growth and advancement.
A quarter of all Australian exports now go to China, including A$65bn worth of minerals.
Australia's triple A credit status is about as threatened as Kylie Minogue's standing as an Australian National Treasure.
'Saved by China'
In fact, Australia is the beneficiary of a double Chinese dividend.
As goods and commodities head north, tourists travel south.
Lots of them.
Some 10 years ago, 100,000 Chinese visitors came to Australia. Last year it was 500,000.
One of them is Bill from Beijing.
"The Chinese are prosperous and want to travel, " he says as he surveys Sydney's famous Chinese Garden.
"Sydney and Australia are very close and very welcoming."
That is encouraging news for Rowan Barker from the Tourism and Transport Forum, a government organisation that promotes Chinese tourism.
"The Chinese are saving us," he says bluntly.
"As the Japanese, Americans and even British fall back, the Chinese have this year become the biggest group of overseas visitors, after those from New Zealand."
Tourism and commodity exports are just two expressions of China's growing influence in the Asia Pacific region.
Others, at least for some Australian's, are less appealing.
The most prominent is the rising Australian dollar.
As many parts of the economy boom, so the dollar has zoomed up.
It has been jigging around the parity mark with the US dollar all year.
That is good news if you are an Aussie tourist leaving the country, but it is bad news if you are an Aussie exporter trying to flog goods.
"For every cent the Australian dollar rises," says Richard Raines, who exports cattle, "it costs the cattle industry A$50m."
The same pressure is being felt by manufacturers, wine producers and textile makers.
Talk of an Australian "two speed economy" has kept columnists, commentators and commodity brokers busy all year.
Different parts of the Australian economy are moving in opposite directions - the China-facing bit going forward, the rest travelling pretty much in reverse.
One sign of this is the way an estimated 100,000, or 10%, of the nation's manufacturing jobs have vanished in the past two years.
'No alarm bells'
Politically and strategically the China/Australia equation is more simple to summarise.
US President Barack Obama's keep-the-engine-running visit to Australia in November might have been measurable in hours, but at least it produced a decision to send more than 2000 US marines to Darwin.
That is the top tip of Australia, closest to China and one, you might think, that would have Beijing on the blower.
But the official Chinese response amounted to no more than mild rebuke for the enterprise.
Indeed, one sign of the increasingly relaxed nature of bi-lateral Sino-Australian relations came this year when, for the first time, a small Australian military contingent carried out a joint disaster-response exercise in China, with Chinese troops.
The two countries are enjoying thriving links, according to Professor Vic Edwards of the University of New South Wales.
"Yes, there are concerns about the impact of China on the Australian dollar and about Australia's ties with the United states," he says.
"But no alarm bells are being sounded. On the contrary, everything is in a very healthy state."
The bear-pit, take-no-prisoners, polarising ambience that usually characterises Australian politics also finds common ground over China.
It is the 800 pound gorilla in the room that no one can, or wants, to ignore.
Geography, nature and foresight have given Australia a unique set of bonds with China.
China has helped make the average Australian better off than the Swiss.
That might not have every Aussie yodelling with delight, but right now, this is a relationship working like clockwork.