Who wants to be a trillionaire (can China save the world)?(2)

            Fourthly, China is having some slowing pains itself. As well as the
            stock market falls there's been lay-offs in the industrial heartland
            of the Pearl River Delta, falls in retail sales at the same time as
            key skilled labour shortages in growing sectors of the Chinese
            economy. The property markets in the richer coastal cities like
            Shanghai and Guangzhou are also exhibiting some weaknesses in terms
            of values and behaving like any western industrialised cities in
            terms of real estate.
            Finally, it's important to watch investment flows as well as trade
            flows. Strong outward FDI flows from China are replacing the
            traditional trade route as a form of global engagement ?or more
            strictly regional engagement within the Asian hemisphere. We've
            witnessed this in Australia recently with an estimated $30 billion
            of Chinese FDI in Australian projects since November 2007 compared
            to around $10 billion over 2005-06 and 2006-07, according to
            Australian National University economists Christopher Findlay and
            Peter Drysdale. This is occurring mainly through China's state owned
            enterprises ?who have preferential access to credit ?although many
            are moving to be on a more commercially-based footing.
            So what does this mean for Australia and for the rest of the world?
            For Australia, the trade and investment links with China and the
            emerging economies are going to especially help us endure the global
            credit crisis. Australia's share of good exports to emerging
            countries has risen from 53 per cent compared to 43 per cent 10
            years around China (and India) are an important part of that story.
            In 1999, China and India accounted for just under 6 per cent of
            Australian exports, whilst in 2007, 'Chindia' accounted for 18 per
            cent (with Japan on 16 per cent and 'other East Asia' on 16.7 per
            cent). Over this period average annual growth rate of Australian
            exports was 24.8 per cent for China and 24.7 per cent for India.
            Australia, by opening up our economy and re-focussing towards Asia,
            has managed to improve our trade share in the part of the world
            where there is most economic growth.
            But the risks to China are not to be underestimated. Firstly the
            challenge of domestic economic development ?especially in the poor
            rural areas ?are colossal despite Beijing's clear focus on the
            western inner regions of the country. Secondly, whilst China has
            opened up to trade by joining the World Trade Organisation (WTO),
            the focus on FDI and building market-based outward looking
            international businesses will be a major challenge to China (and its
            financial institutions that will fund them). In some ways, India has
            developed many global brands like Tata and Infosys that are
            confidently strutting the world stage whilst China's past over
            reliance on inward FDI may have stifled the development of China's
            own global business brands.  Thirdly, China still has to deal with
            the challenges of climate change and the balance between
            environmental goals on one hand and industrial development and
            poverty reduction goals on the other. In many ways, China has to
            save itself before it can save the world.