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Australian economy won't rely on China

Australian economy won't rely on China article image
Australian Treasurer Wayne Swan has responded to a report released by Access Economics, welcoming its forecast of positive growth for 2010 but warning against Australia's reliance on the Chinese economy. The report highlighted the importance of China to Australia, with China's recent recovery brightening the outlook due to a boost in demand for Australia's resources to feed China's industrialised growth. Swan acknowledged China's role in Australia's economy but noted that export growth was not yet sustainable: "Certainly the recent patterns [in China] have surprised on the upside [but] we certainly can't count on that as we go forward and we haven't been counting on that." He said that there were other global factors at play that could yet affect Australia, particularly with regard to unemployment. "There are still very substantial global headwinds affecting economies around the world and also affecting the Australian economy in particular," said Swan. "We will see that in the dramatic drop in business investment, we'll see that in the dramatic drop in the terms of trade. Those factors will push up unemployment locally." The Access Economics report saw unemployment peaking at 7.5 percent next year, one percent less than official forecasts, and projected Australia's growth at 0.4 percent in the year to July 2010 compared with the Government's forecast of a 0.5 percent contraction.

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