Critics argue Australian surplus in 2 years will be ‘made in China’ because of export reliance

Source: Associated Press

CANBERRA, Australia — The Australian government has been accused of relying on a “made in China” export boom to achieve its projected surplus within two years, with critics arguing Wednesday that any drop in Asian demand for natural resources could spell disaster.

Opposition lawmakers called for further spending cuts to ensure the deficit comes under control.

Prime Minister Julia Gillard’s first budget since her Labor Party won a slender election victory last year proposes to turn a 49.4 billion Australian dollar ($53.6 billion) deficit in the current fiscal year ending June 30 into a AU$3.5 billion surplus in 2012-13 by containing spending and reaping the benefits of a resource boom. The boom is generating record trade surpluses through iron ore, coal and natural gas exports to China and other emerging Asian economies.

The government plans to contain spending growth to 1 percent above inflation while the economy is forecast to grow at 4 percent in the next fiscal year.

Read more: http://www.washingtonpost.com/business/critics_argue_australian_surplus_in_2_years_will_be_made_in_china_because_of_export_reliance/2011/05/10/AF1lz2kG_story.html

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Hopefully emigrating there soon.

They imported $29 billion from China and exported $30 billion to it. They imported $22 billion from the US and only exported $9 billion to us.

And yet the conservative opposition in Australia "said the government had failed to adequately rein in spending" (can "we must cut taxes for the rich" be far behind). Something tells me that if Gillard was projecting a trade surplus with the US or the EU (with whom Australia also has a big trade deficit), her conservative opposition wouldn't be warning that projected surpluses were "made in American (or Europe)".

http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=E&Country=AU,CN,DE,IN,JP,KR,RU,GB,US,VN
http://www.census.gov/foreign-trade/balance/c6021.html

Not a biggie.

I don't understand why they assume this should be any different.

If anything, any deal between China and Australia would only strengthen both and would grant both more assurance that it would have better long-term effects.

This could be their best possible option at this point.