The role of China sustaining Australia's economic boom

It is well known China was Australia's most important trading partner during the mining boom continuing after the worldwide economic slowdown. Whilst Japan had been Australia's main trading partner, the freeing up of the Chinese economy ensured dramatic growth during the period of economic reform.

Australia was well positioned to take advantage of China's boom with unprecedented prices for raw materials, namely iron ore and coal. The GFC didn't hit Australia hard like the rest of the world, sure there was a slowdown, but with the Chinese appetite for Australian commodities keeping demand and prices high throughout the aftermath of the GFC, the Australian economy rolled on relatively unaffected.

China was investing in their own economy constructing cities and infrastructure and the export of finished goods. Australian mining capital expenditure peaked in 2012 as the construction boom ended and the production phase started.   

The Australian stimulus announced during the GFC was a poorly focused spending spree designed to buy votes blowing a huge hole in the federal budget - damage that hasn't been repaired yet. Ironically the Chinese stimulus was more beneficial to Australia than the federal government stimulus.

Whilst I was not against increasing spending in a controlled targeted manner, the wild spending increases just wasted money whilst the mining industry drove the country along. Now that the iron ore price has plummeted throughout 2016, the Australian economy was in decline with 2016 proving to be a whole lot worse than what 2015 was and unfortunately 2017 is looking to still be pretty concerning.