NAB takes a closer look at the growing economic integration of the Australian economy to growth in the Chinese economy.

• Australia’s growth is becoming increasingly sensitive to the strength of the Chinese economy
• China’s growth looks to be heading towards a soft landing
• But what would happen if growth is de-railed? It seems likely that a commodity fallout would follow
• Commodity-sensitive $A and macro policy would provide significant offsets to this

In this note, we will take a closer look at the growing economic integration of the Australian economy to growth in the Chinese economy and examine what would happen to the Australian economy if the Chinese growth story is derailed. Even though this is not our central forecast, it is still a subject that we are vitally interested in given the increasing importance of China to Australia’s growth prospects.

For further analysis download the full report

• China’s role in Australia’s economy – 1 June 2012  (310 kb)