Reserve Bank of Australia (RBA) deputy governor Ric Battellino says fears about Chinese investment are overblown.

He says that while China has figured prominently in the public consciousness regarding foreign investment, it accounts for but a tiny fraction of foreign capital invested in Australia.

“Australian Bureau of Statistics (ABS) data indicate that, at the end of 2008, Australian assets owned by Chinese entities stood at around $8 billion,” he said.

“This is less than half of one per cent of total foreign investment in Australia, and puts China a long way down the list in terms of importance as a source of investment,” Mr Battellino said in a statement.

Mr Battellino told the 3rd Annual Australian Parliamentary Conference in Perth that, from China’s perspective, Australia accounts for an even smaller share of its total offshore investment less than one quarter of one per cent.
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A new raft of upbeat economic numbers out of China suggests Australia’s recovery story would be a totally different tale without the needs of the Asian giant.

The latest round of figures from China’s National Bureau of Statistics released on Friday shows industrial production is growing at its fastest pace in a year, retail sales growth accelerating to the best levels in 2009 and investment at its highest level in nearly five years.

“Australian resource producers have every reason to celebrate the strength of the Chinese economic recovery,” Commonwealth Securities economist Savanth Sebastian said.

“Without China it would be a very different world - not just for Australian miners but for our economy as a whole.”
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Federal government coffers will take a hammering as a result of the slowing Chinese economy but the government won’t say whether it will push Australia into recession or the budget into deficit.

Prime Minister Kevin Rudd has warned that economic conditions will worsen this year but is promising a “steely” approach to managing the fallout from the global financial crisis.

“Things will get worse before they get better,” Mr Rudd told an Australia Day reception at Kirribilli House on Monday.
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Yep, it’s so bad some companies are actually resorting to telling the truth.

Société Générale says it expects the United States’ economy to enter a depression and that China’s economy in in danger of imploding. Albert Edwards, an analyst for the European financial services giant, wrote: Full Story

The Reserve Bank of Australia (RBA) has slashed its forecast for economic growth and indicated there’ll be further official rate cuts, albeit in a more conservative fashion than of late.

But while the central bank painted a grim outlook in its quarterly monetary policy statement, released today, China appeared to throw Australia a lifeline after announcing a massive four trillion yuan ($A856 billion) economic stimulus package.

The package is expected to boost spending on infrastructure, as well as agriculture and other sectors, soothing concerns that an economic slowdown in China would rein in demand for Australian resources.
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The head of ANZ Banking Group Ltd has become the second bank chief executive to predict Australia won’t fall into recession next year.

The boss of Australia’s fourth biggest bank believes the nation will escape the negative economic growth conditions that are set to afflict other major economies because it is closely aligned to regional powerhouse China.

But recessionary conditions around the world are still likely to cut back Australia’s growth prospects to a below average two per cent.
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