Our model suggests half a billion workers would lose their jobs worldwide, including one fifth of employed Australians. The worth of financial assets would fall by one fifth on average, and by one quarter in Australia.
The value of Australian goods subject to Chinese trade restrictions is still small at 4.5% of total exports. If a larger share of goods was impacted (like iron ore which is worth 27% of total exports), it would have a larger negative short-term impact on the economy. But this would also impose a greater cost on China.
Trade and investment
China is Australia's largest two-way trading partner in goods and services, accounting for nearly one third (31 per cent) of our trade with the world.
If the U.S. is forced to sell half of its direct investments in China, that would cost American investors $25 billion a year in capital gains and up to $500 billion in GDP losses, the report said. U.S. businesses risk losing global competitiveness if sweeping policies force separation from China, the report said.
Why it matters to Australia (and beyond) Australia's economic fortunes are enmeshed with China's, even as we're warned its military threat is the worst in decades. China is easily Australia's largest two-way trading partner, accounting for about a third of all trade.
Relations with China are one of the most important aspects of Australia's foreign policy. As an emerging great power in our region with whom Australia is developing a major economic relationship, good relations with China will become an increasingly prominent feature of Australia's international interests.
Answer: No country in the world is self-sufficient in all its needs. Goods produced by one country are required by the other and vice versa. Hence differences in resources, needs and development among nations create conditions for international trade between them.
As if we boycott Chinese products immediately, then there will be a decrease in the supply of such products and goods in the market as Indian producers are not much in production, and this situation will ultimately lead to an increase in the prices of such products and goods in the Indian market.
Australia is China's sixth largest trading partner; it is China's fifth biggest supplier of imports and its tenth biggest customer for exports. Twenty-five per cent of Australia's manufactured imports come from China; 13% of its exports are thermal coal to China. A two-way investment relationship is also developing.
Why it matters: The United States imports roughly half a trillion dollars in goods from China, including clothing, shoes, electronics, furniture, and household appliances. Those imports help improve the lives of many Americans, particularly those in low-income households who benefit from lower prices on everyday goods.
The United States and United Kingdom are the biggest investors in Australia, followed by Belgium, Japan and Hong Kong (SAR of China).
Dr Wang said the decline of China's housing market would result in weaker demand for Australia's export of raw materials, such as iron ore, but that Beijing's stimulus policy could create new opportunities for the essential Australian industry.
While China is economically critical for Australia, the reverse is less true. Some 70% of Australia's exports are resources for which there are alternative suppliers. Iron ore exports, which depending on price equate to up to 10% of Australian GDP, are important.
Without international trade, few nations could maintain an adequate standard of living, particularly those of smaller size. With only domestic resources being available, each country could only produce a limited number of products, and scarcity would be prevalent.
#1 Singapore
Read More About SingaporeSingapore's economic freedom score is 84.4, making its economy the freest in the 2022 Index.
China has established the world's largest social security system and education system, with more than 1.3 billion people covered by basic medical insurance and education at all levels having reached or exceeded the average level of middle and high income countries.
Our model suggests half a billion workers would lose their jobs worldwide, including one fifth of employed Australians. The worth of financial assets would fall by one fifth on average, and by one quarter in Australia.
Australia has plentiful supplies of natural resources, including the second largest accessible reserves of iron ore in the world, the fifth largest reserves of coal and significant gas resources.