Australia's dependence on Chinese money has been a blessing for the local economy, but it could unravel painfully if China's economic slowdown worsens.
Given that China is the world's second-largest economy, its slowdown is expected to have a ripple effect across the world.
A third of Australia's exports are shipped to China, meaning any shockwaves from Beijing will be felt particularly sharply in the lucky country.
In recent months, China's economy has taken a beating as a consequence of its ongoing trade war and tit-for-tat tariffs with the United States.
The latest figures revealed that its exports fell by an unexpectedly sharp 4.4 per cent in December, while imports plunged 7.6 per cent — their biggest monthly slide in at least two years.
China's manufacturing sector also took a dive, with factory activity contracting for the first time in 19 months.
Apple even blamed its recent profit downgrade on China's slowing economy — with GDP growth at 6.5 per cent in the September 2018-quarter, its slowest pace in almost a decade.
Earlier this month, China's central bank slashed the amount of capital that its domestic banks need to hold as reserves, for the fifth time in 12 months, to boost the money available for loans.
"For Australia, weakening global growth presents a challenge, but the key is what happens to China and commodity prices," said Paul Bloxham, HSBC's chief economist.
"After all, China is Australia's largest trading partner, the dominant source of demand for most commodities and the key driver of growth for the Asian region.
"Interestingly, it seems that so far, most of the weakening in China's growth momentum has been in its domestic indicators, rather than a sharp slowdown in exports."
Mr Bloxham expects China to implement further stimulus measures to boost its economy, including further loosening of monetary policy, greater infrastructure spending and devaluing its currency.
How much is Australia leaning on China?
Iron ore and coal are Australia's key exports, together worth more than $120 billion — or 30 per cent of what gets sold to foreign countries.
They are followed by education services, which rake in $32.4 billion (or 8 per cent of the nation's exports) from international students.
These happen to be the key goods and services that China buys from Australia.
In 2017-18, China was by far Australia's largest trading partner, contributing $194.6 billion worth of imports and exports. This was more than the combined value of trade with Japan and the United States ($147.8 billion).
When considering exports alone, China's share is disproportionate compared with every other trading partner.
Australia sells a massive 30.6 per cent ($123.3 billion) worth of its exports to China, according to figures from the Department of Foreign Affairs and Trade (DFAT).
That eclipses what Australia sells to Japan, South Korea, the United States and India combined ($117.5 billion) — 29.1 per cent of its exports.
Exports to China have surged 56 per cent since 2012-13. In comparison, the next biggest export market, Japan, grew by just 6 per cent in the last five years.
More diversified imports
In comparison, Australia does not rely as heavily on a single country for its imports. Australia buys most of its foreign goods and services from:
In 2017-18, the nation's biggest imports were:
Chinese tourism surge
More signs of the nation's over-reliance on China can be seen in the tourism sector.
DFAT figures revealed that Chinese tourists spent $11.3 billion during their Australian holidays last financial year.
In percentage terms, that was more than a quarter of what the entire market was worth — the equivalent of what American, British, New Zealander and Japanese tourists spent combined.
A boom in Chinese visitors since the nation's President Xi Jinping's visit to Tasmania has contributed to the island state recording Australia's strongest tourism growth over the past year.
That gives Australia more reason than most countries to hope that the US and China can resolve their trade differences sooner rather than later and that Chinese authorities move more aggressively to stimulate softening domestic demand.
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