On Sunday, Australian Treasurer Jim Chalmers expressed concern over the recent weeks and months of economic weakness in China, noting its significant impact on Australia due to China being Australia's largest trading partner. The government is closely monitoring the economic prospects of China.
In recent months, China, the world's second largest economy, has been faltering due to a severe downturn in the real estate market, weak consumer spending, and a significant decrease in credit growth. Despite the People's Bank of China cutting some interest rates consecutively and promising further support, it has not reversed investors' pessimistic expectations for the Chinese economy.
China is Australia's largest trading partner, with annual trade between the two countries amounting to 285 billion Australian dollars. Chalmers stated that China is dealing with slowing growth and exports, and recent data not only shows signs of deflation but also reflects risks in China's real estate and certain financial institutions.
This month, the Reserve Bank of Australia kept interest rates unchanged for the second consecutive month, after raising rates by 4 percentage points over 16 months to curb inflation. Chalmers indicated that the weak economic outlook in China and the rate hikes by the Reserve Bank of Australia could significantly reduce the country's future economic growth rate.
Recent data shows that affected by high prices, rising interest rates weakening consumer spending, and China's economic slowdown, Australia's economic growth in the first quarter was 0.2%, the lowest in a year and a half.
