Howard warns against China reliance
Howard warns against China reliance

Former Prime Minister John Howard has warned Australia about becoming too reliant on China at the expense of longer-serving economic and political partners.

China has overtaken Japan in recent years as Australia's biggest trading partner, with its demand for raw commodities feeding the mining boom now sustaining the country's economy.

However, Mr Howard told a Chamber of Minerals and Energy lunch in Perth yesterday that Australia should "keep a sense of perspective" and not make the mistake of assuming China's interest in its natural resources won't recede.

"There's no reason why that shouldn't continue; there's a reasonable expectation that it should continue," Mr Howard said.

"But we shouldn't lose reality when it comes to China.

"The world runs the risk of being just a little mesmerised by China.

"We can't assume China will be there for ever and ever buying our resources."

Last year, Australia's exports to China totalled $71.5 billion - predominantly minerals, chiefly WA iron ore - while Japan accounted for $50.5 billion.

Mr Howard, who said Australia's economy owed more to the trading relationship the country fostered with Japan from the late 1950s than China, said China faced its own challenges, including urbanisation and its ageing population.

Also, it "would be a mistake" to assume there was an inevitability about China overtaking the US as the world's most powerful country. "I don't think that will ever happen," Mr Howard said.

But he described as "stupid" suggestions Australia should one day choose between China and the US as its major strategic partner. "That would not be to our benefit."

Just last year, the International Monetary Fund tipped China to overtake the US as the world's biggest economy by 2016.

The lunch followed the CME's annual meeting where another record year for the WA resources sector could not hide industry's frustration over rising taxes.

The value of the State's resources production topped $100 billion last year, with 100,000 people employed.

However, the chamber remains concerned over its inability to confirm rumours the Federal Government is mulling changes to the diesel tax rebate, which is worth hundreds of millions a year to each of the big miners, or suggestions the State Government may tinker with the royalty regime in its Budget late this month.

Mines and Petroleum Minister Norman Moore declined to comment on Budget deliberations but told the meeting he was doing "my best to ensure we are not seen as an avaricious government".

Mr Moore had earlier listed avaricious governments as a threat to the mining industry's health, along with green activism, the skills shortage and misinformation over the likes of fraccing.

The West Australian

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