A world-renowned British economist said on Wednesday that Australia is in an excellent position to capitalise on China’s growth.
Jim O’Neill, former Goldman Sachs chief economist, spoke candidly to the Australian Financial Review, about the need for Australia to capitalise even further on the opportunities China’s growth presents while in the country for a two-day business summit.
O’Neill noted that although Australian banks comprised a high percentage of the market capitalisation,when combined with the high cost of housing and the subsequent debt attached could be a risk, he still has a positive outlook on the economy.
“It seems to be, notwithstanding the housing threat, Australia is in a really good position.” O’Neill said.
Long a believer in the potential of the emerging BRIC (Brazil, Russia, India, China) markets, O’Neill maintains that China remains the strongest performer of those economies, with other Asian nations trying to catch up to the growth China has achieved.
“The other big juggernauts coming up behind China are in this part of the world as well, India and Indonesia.” O’Neill said.
O’Neill predicts a bright future for the Chinese economy, and stressed that the effective strategy to shift from “old” economic drivers, manufacturing and pollution, towards a service based economy would lead China into an even greater future.
“It’s (China) heading towards another decade where GDP will double again,” O’Neill said.
“This era of China’s growth, which I like to call the new China, is all about the rise of the consumer and they don’t have any debt.”
As a member of the British House of Lords, O’Neill also touched on Brexit, and maintained that China could be a crucial factor in assisting the transition for Britain into a post-EU economy.
“If the UK was particularly focussed and successful on trade with China, India and Indonesia, then we would cope with Brexit.” O’Neill said.