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  1. China economic transition poses risks to Australia: RBA official

China economic transition poses risks to Australia: RBA official

China's economic growth is likely to experience a "gradual moderation" over the next few years, though there are a number of risks to be mindful of, an Australian central banker said on Thursday.

By: | Updated: June 16, 2016 10:24 AM
Australia economy China is Australia’s single biggest export market. (Reuters)

China’s economic growth is likely to experience a “gradual moderation” over the next few years, though there are a number of risks to be mindful of, an Australian central banker said on Thursday.

Speaking on “The Economic Transition in China” at a business lunch in Brisbane, Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent said Beijing has so far relied on more, rather than less, accommodative monetary and fiscal settings to support its slowing economy.

“To the extent that this represents a re-prioritization of short-term objectives over longer-term sustainability, it may increase the likelihood of a future disruptive adjustment,” said Kent, who is also chief economic advisor to the RBA Governor and the Board.

Also Read: Australian economy outpaces global peers, rates seen on hold

“Even so, the (Chinese) authorities will no doubt respond if the economy experiences shocks that might otherwise lead to a so called ‘hard landing’ for the economy as a whole.”

For Australia, Kent said the primary risk posed by the uncertain outlook in China is to commodity prices and the exports of goods, particularly resources, and services.

China is Australia’s single biggest export market.

Kent made no mention of Australia’s monetary policy setting. The RBA left the cash rate unchanged at a record low 1.75 percent earlier this month as widely expected, following a surprise cut in May on persistently low inflation.

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