The definition of “slow growth” in China is two to three times the growth of anywhere else. Such was the case in 2012, when the world trembled because China’s economic growth rate was below 8%.
But the latest figures from China’s National Bureau of Statistics depict on economy that should never been mentioned in the same sentence as “slow”.
The economic growth rate in the December Quarter rose from 7.4% to 7.9%. That’s about 140% higher than our growth rate – and Australia ranks highly on a global scale.
China’s industrial output rose 10.3%, and fixed-asset investment rose 20.6% last year. Retail sales grew 15.2%, year on year, to the highest point in eight months.
China is Australia's largest trading partner and a major customer for our resources, so it’s positive news that it continues to grow so strongly.
But, of course, it’s not all about China. We have plenty of other important customers, and one of the most important is India.
India has a particularly big appetite for coal, something that’s not so good for the global environment but decidedly good for the Australian economy.
Queensland, in particular, stands to benefit from Indian investment in the coal industry, with two entities each planning to spend around $10 billion on mines, rail links and export facilities.
All this has been percolating while people have been writing the obituary for the resources sector.
Now we have India’s Ministry of Coal instructing the country’s mining companies to be “more aggressive” in securing mining projects internationally, with Australia at the top of the list. India has a massive and growing population creating big demand for power supplies, and coal-fired power stations are very much in vogue in India.
So we have two of the biggest customers for Australian resources in an expansionary phase.
That feeds into property markets around the nation, especially in Queensland and Western Australia, but also in South Australia, the Northern Territory and New South Wales.
I have recently written reports including National Top 10 Best Buys 2013 and National Top 10 Boom Towns – and many of the 20 locations that feature in those two reports are touched by the resources sector. Most are not dependent on the mining industry, but the influence of that sector often elevates these places from solid economies (and property markets) to very strong ones.
So the ongoing health of the resources industry is important to key property markets.
I believe “the resources revolution” is only getting started and will extend beyond my lifetime because the growth processes under way in China, India and elsewhere. I always thought claims of its demise in the second half of last year, mostly because of a short-term fall in commodity prices and the so-called slowdown in China, were ill-advised – more to do with the short-term news cycle than properly informing people.
Now we have iron ore prices climbing again, China growing strongly, India hungry for coal and multiple massive gas ventures charging ahead.
It will be the basis for strong price growth in many markets in 2013.