Report reveals steady China at heart of Australian economy

Australia's major international bank, Westpac has reaffirmed the leading role China plays within the Australian resource-heavy economy, with the latest Westpac Bureau of Resources and Energy Economics (BREE) study released last week, showing a Chinese economy performing at cruise speed through a sea of ongoing global anxieties. According to Senior Westpac International Economist Huw McKay, the economy of Australia's most important trading partner grew at a rate close to its potential in December and for 2013 overall. McKay said Monday the "respectable performance" in the September quarter is now looking very much like the peak for growth momentum in the current cycle phase. The WestpacBREE China Resources Quarterly is a core reference publication analyzing the macroeconomic situation with commodity specific insights so critical in the Australia-China economic relationship. McKay told Xinhua, this edition has been compiled against a backdrop of anxiety in the China watching universe, with a mild slowdown in the real economy coupled to the perception of growing financial risks. The findings will be watched closely in Australia's current reporting season for the globally-ranked miners such as Rio Tinto, reporting financial results due this week. McKay told Xinhua, Australia continued to play an important role in meeting the growth in China's consumption, with increased export volumes registered across most commodities. "Australian commodity producers continued to play a key role in Chinese economic consumption during the period, with record 2013 shipments of iron ore and thermal coal as part of a strategy by local producers to boost volumes amid weaker prices." Australia exported a record 442 Mt of iron ore and 42 Mt of thermal coal to China in 2013. According to Westpac, imports are playing an even more important role in meeting China's overall mineral and energy demands, and in many commodity markets, Australian producers have increased their market share in volume terms. This factor has mitigated the impact of lower prices on overall export earnings. China's resources and energy use -- so important to the heartbeat of Australia's two-speed economy -- maintained an upward trajectory in 2013.