Chinese government work report sends encouraging signals to Australia

Australian media have devoted much coverage to the Chinese government work report delivered by Premier Li Keqiang to the annual session of the National People's Congress (NPC) on Sunday, stressing that China's sustained growth will benefit Australia.

The Australian Financial Review (AFR), Australia's Number One financial newspaper, Monday had a front page feature, as well as stories throughout, highlighting the policy direction China will be taking in economical development, national defense and foreign affairs.

On the front page under the banner headline of "China stays on growth path," the writers of the story, Angus Grigg and Lisa Murray, said China's plan to increase spending on infrastructure will benefit Australian mining companies.

"The confirmation that China was largely sticking to the economic growth script, and putting off any drastic, and potentially destabilizing, reforms will be interpreted as good news for Australian exporters of iron ore and coal," they said.

In one of the other AFR pieces, Grigg said that the Chinese government work report with its focus on "stability" will ensure that growth remains constant in China, defying expectations by some that this would not be the case, and providing a boon for the Australian economy.

"This suggests the sharp fall in commodity prices forecast by some is unlikely to eventuate this year," Grigg said.

The Australian, Australia's largest national paper, also featured the work report heavily, as Rowan Callick, their China correspondent, said the Chinese government with the report is "standing firm in not adopting strong stimulus policies and continuing to give top priority to creating jobs."

It also mentioned China's strategy to eliminate "zombie enterprises" that receive funding but have no positive effect on the economy.

It was not just the media that reacted positively to the government work report, with economists in Australia also extolling the benefits of China's strategy for the next year.

Professor James Laurenceson, deputy director of the Australia China Relations Institute at the University of Sydney, told Xinhua that the continued stability of growth in China is great news for Australia.

"At the moment Australian services to China are growing at 20 percent per year and agricultural exports are doing well too. So it's a continuation of the positive impact on Australia," Laurenceson said.

Laurenceson also believes that the next 12 months will see "significant" economic reform in China, which will further boost not only the Chinese economy, but the Australian economy as well.

"So if China continues to grow at 6.5 percent and China implements more infrastructure spending, that will require Australian iron ore, Australian coal, so I expect another 12 months of quite broad based Chinese demand for our exports," Laurenceson said.

Evan Lucas, market analyst at the IG, was confident in the positive impact of the Chinese figures, noting that the early Monday morning trade saw the mining sector in Australia picking up a lot of value.

"That's positive, with the 6.5 percent growth target being seen as a floor, rather than a target," said Lucas.

Wei Li, Asia economist at the Commonwealth Bank of Australia, said the Chinese government's strategic plans will have positive impacts across the globe.

"The Chinese government's commitment to fast infrastructure investment and continued cut in steel and coal overcapacity are positive for both domestic and global commodity prices," he said.

 Source: Xinhua