China to bounce back quickly

AUSTRADE'S senior trade commissioner for China, Christopher Wright, has predicted a fast return to high economic growth in China.

Mr Wright gave his optimistic forecast for the country at a seminar in Adelaide about the impact of the global financial crisis.

The seminar covering key export markets was entitled Beyond the Financial Crisis: Emerging Export and Investment Opportunities in an Uncertain World.

Mr Wright said the slowdown in China last year was as much a result of internal Chinese policies to slow its over-heated property markets as it was a rapid drop-off in exports in the last quarter.

"China has a vast number of infrastructure projects and because the economy is not running so hot, those projects can now go ahead," he said.

"What it means is we can see a fairly fast return to high levels of growth with a sustained level this year and a pick-up next year.

"It is still growing, whether you take the International Monetary Fund figure of 6.5 per cent or the Chinese Government number of 7.7 per cent or some banks, which are higher."

Mr Wright said China had maintained a nine per cent growth rate in the past 30 years.

The two main exceptions were the Tiananmen Square massacre in 1989 and the Asian financial crisis in 1997, which had an impact on China in 1998, with a drop in growth on both occasions to about 5 per cent, he said.

"This time the slowdown in growth has not been as fast or deep and we will see it return to a similar level of 8-9 per cent in the next year," he said.

Mr Wright said China was still a growing economy, which meant continuing demand for products from Australian exporters and businesses.

"The China story is 30 years long already and it will go for another 30 years," he said.

"People who say there is no demand for Australian commodities in China are wrong.

"You cannot keep building an economy like China without pulling in more materials."

Mr Wright said a range of measures under way in China were helping to put a floor under demand for products.

Recent indications of good news on the China front included a 20 per cent rise in cargo traffic and a six per cent rise in cargo on the Yangtze River last month, the first climb since August.

He believes the outlook for Australian commodities is extremely positive, with demand for food and wine shipments rising rapidly.