A lot has been made about the commercial closeness of China and Australia in the past couple of years.
It’s certainly the case and yesterday we got some official figures that confirmed the increasing tightness of this trading relationship.
If anything, it got closer in the December 2009 half, especially when overall imports into China were down for much of the period.
The trade figures for December confirmed that while we had another bout of red ink in the month with imports topping exports by $2.25 billion, our trade balance with China rose another $1 billion or more, with exports in the month to that country up 16% and imports down 6%.
The Australian Bureau of Statistics release of December trade figures showed (on Page 27) that we are certainly riding China’s expansion.
During the month, exports were up 4% in adjusted terms to $19.76 billion, while imports rose 6% to just over $22 billion.
But those bald figures hide the significant change that happened in the half year ending December 31.
The ABS figures show that of all our major markets including Japan, South Korea and India, China was the only one where our exports rose in the six months ending December 2009 from the same six months of 2008.
The falls are influenced by the impact of the high iron ore, coking and steaming coal prices in the December half year in 2008 and their fall from April 1 last year.
But while that had an impact in shipments to Japan and South Korea, it had no impact on exports to China (except to trim prices in the early months of the half year).
Exports to China rose from $17.53 billion in the last half of 2008 to $20.54 billion in the six months to December 2009.
That was a rise of 16.5%.
It was the jump in imports of iron ore and also various coals that helped push up exports to China, along with a surge in spot market prices for these commodities, especially iron ore from October onwards as Chinese buying stoked the market.
Interestingly imports from China slipped 6% to $19.15 billion from $20.41 billion, meaning that our trade position with China moved more heavily in our favour.
Exports to Japan slumped to just on $17.4 billion in the back half of 2009, from more than $31.9 billion a year earlier.
The fall in prices for iron ore, coal, LNG and oil helped push export values down but, unlike China, there was no surge in volumes to make up for the drop.
Exports to South Korea fell to $7.4 billion from more than $11.1 billion, while the growth in shipments to India stopped.
Exports there fell to $7.39 billion in the six months to last December, from $8.38 billion.
Overall, our exports fell from $127.6 billion in the six months to December 2008, to $92.8 billion in the period ending December 31 last.
It is quite clear that without the boost from China, Australia would be doing it much tougher, local stimulus and rate cuts not withstanding.
