China’s short term economic prospects are dimming, while America’s are brightening. American tariffs have already stunted China’s exports and though Trump has postponed further tariff increases, he has not removed those he previously introduced. But the immediate risk for China is its coronavirus outbreak.
China is considering cutting its 2020 economic growth target as the epidemic spreads beyond Wuhan. Bloomberg Economics expects China’s annual rate of GDP growth to fall from 6% to 4.5% in the current March quarter. The Peoples Bank of China has responded by pumping 1.2 trillion yuan (A$260 billion) into the banking system to steady the economy and share market.
Australian exports such as iron ore, LNG, coal, seafood, dairy, grains and meat depend heavily on the Chinese market. Our tourism industry hosts 1.5 million Chinese visitors a year and Australian universities have 100,000 Chinese students.