Australian Treasurer Jim Chalmers recently expressed his support for China’s efforts to stimulate its slowing economy, recognizing the impact of China’s economic weakness on Australia. Chalmers, during his visit to Beijing, highlighted the interconnectedness of the Australian and Chinese economies, particularly in terms of trade, emphasizing that steps taken by China to boost economic activity would benefit Australia. China is a major buyer of Australia’s key exports like iron ore and coal, making its economic performance crucial for Australia’s prosperity.

Chalmers acknowledged the challenges faced by Australia’s economy due to global economic uncertainties, high interest rates, and China’s economic slowdown. He noted that Australia’s economic growth has been significantly affected by these factors. In an opinion piece published in The Australian newspaper, Chalmers pointed out that China’s annual economic growth is forecasted to be below 5% for the next three years, marking the weakest expansion since the late 1970s.

During the visit, discussions were held for the Australia-China Strategic Economic Dialogue, signaling a revival of annual talks aimed at enhancing trade and investment ties after a seven-year hiatus. This comes after China imposed trade bans on Australian commodities in 2020, costing Australian exporters billions of dollars annually. Chalmers mentioned that these trade impediments now have a reduced impact on Australian exporters compared to previous years.

The improvement in bilateral relations between Australia and China was evident during the meetings, with Zheng Shanjie of China’s National Development and Reform Commission emphasizing the opportunities for economic development and cooperation between the two countries. This positive outlook is seen as crucial amid the complex and turbulent international situation.

Chalmers was also expected to address concerns regarding Chinese restrictions on Australian lobster and red meat imports, while China was likely to raise issues related to Australian foreign investment rules. Both countries have their own concerns, with China’s interest in investing in Australian critical minerals raising apprehensions in Australia regarding China’s dominance in critical minerals and renewable energy supply chains.

In response to economic challenges post-COVID, China introduced new measures to boost its economy and address issues in the property sector, including lowering bank reserve requirements and interest rates. Reports suggest that the Chinese government plans to inject a significant amount into big state-owned banks for recapitalization. These measures aim to tackle weak consumer demand, deflationary pressures, and a decline in factory activity in China.

The discussions and developments between Australia and China reflect the complexities of their economic ties and the mutual interests at stake for both countries. Despite past trade tensions and challenges, the recent engagements signal a willingness to strengthen economic cooperation and navigate shared concerns for sustainable growth and stability.