Australia and China
The purpose of this paper is to discover the strengths and weaknesses of the two countries’ economies and follow the changes in GDP growth in the countries.
The scope of studies is limited to the analysis of the GDP growth in China and Australia during the last decade.
Nowadays, Australia and China can be defined as two of the most rapidly developing countries with a relatively stable economy. However, even though both have a considerable territory, their population densities are strikingly distinct. Hence, it is quite interesting to analyze how the GDP distribution and overall economic development of the countries differ with regard to the divergent economy orientations and geographical factors.
The methods of the current research include the statistical data review of two countries and primarily of GDP growth during the last ten years.
The main limitation of the study are the focus on a single indicator of the economic development and separate examination of Australia and Chine.
2.1. Australia’s GDP for the last 10 years
According to the data of the World Bank (2015), the annual GDP growth in Australia differed from year to year and was marked by the following indicators in the period of 2005-2015: 3%; 3,8%; 3,7%; 1,7%; 2%; 2,3%; 3,7%; 2,5%; 2,5%. Australian GDP is primarily dominated by contribution of the services sector (“Australia GDP,” 2015). Agricultural and mineral resources are also the essential to advancement of the country’s the economy. Hence, the domestic market plays a great role in the formation of the national GDP rate. The geographical position is also crucial for the financial system of the country as it makes Australia a major regional financial center (“Australia GDP,” 2015).
With regard to the decline of the Australian economy growth, one should refer to its development by industries. In such a way, the most obvious slowdown of GDP growth was observed for such sectors as mining (-3.0%) and construction (-0.6%) (“Australia GDP,” 2015). At the same time, positive changes were observed in financial, transport and healthcare spheres.
2.2. China’s GDP for the last 10 years
According to the data of the World Bank data (2015), the annual GDP growth in China was also different each year. During 2005-2015, the indicators were as follows for each of ten years respectively: 12,7%; 14,2%; 9,6%; 9,2%; 10,6%; 9,5%; 7,8%; 7,7%; 7,4%. In contrast to the previous decades, when the average GDP in the country was 10,8%, the current indicators are quite low (“China GDP,” 2015). The Chinese GDP is influences by three major sectors. The Primary sector, accounting for 9% of GDP, comprises farming, fishery, forestry and husbandry. The Secondary sector with 47% contribution to GDP consists of industry and construction spheres. Finally, the tertiary sector, accounting for 44% of GDP, includes trade, transportation, financial operations, real estate and other services (“China GDP,” 2015).
According to the report for the last 9 months, the weakening of the service sector and mainly of manufacturing to 6 % can be observed. Fixed-asset investment growth decreased to 10,3%, while the net shortage curtailed to 1,8%. The export has decreased by 15,3% (“China GDP,” 2015).
3.1. Australia’s GDP for the last 10 years
According to the statistical data mentioned above, the growth of the Gross Domestic Product in Australia was gradually decreasing since 2007. Even though the next two years were marked as more productive and the GDP growth has reached 3,7% in 2011, the indicators of the following three years demonstrated decline again (“Australia GDP,” 2015).
According to the reports of BBC (2015), the growth during the second quarter of 2015 was not expected primarily because of the decline in the construction and mining sectors, the scope of which was remarkable. The interest rates kept by the Bank of Australia are quite low 2%. Moreover, the fall of the Australian dollar by 0,69$ was regarded as a considerable setback for the economy, as the currency rate had previously fallen only in 2009 but not below 0,7$ (“Australia's growth,” 2015).
3.2. China’s GDP for the last 10 years
According to the statistical evidence provided above, the growth of the Gross Domestic Product in China is the slowest one since 2009 due to decreased industrial output (“China GDP,” 2015). In addition, moderately developing property investment together with exports recession are reported as the essential reasons for such changes. The devaluation of the Chinese yuan on 11 August needs particular attention as it is one of the major contributors to the melt-down of the Chinese market (“The causes and consequences,” 2015).
The changes that take place in the global economy show that all countries are to account for a significant transition. For this reason, search for re-balance is demanded of all the countries and especially of the rich ones. Accounting for 15% of the global GDP, China represents a considerable part of the global growth and, thus, should satisfy the demand (“The causes and consequences,” 2015).
Out of numerous economic indicators, growth rate of GDP is one of the most effective in depicting the development of the country. With regard to the economy of two countries, the GDP growth has obviously declined in both. However, the 2-years indicators show the growth of China as well as the decline are more rapid than those of Australia. The increase of GDP of the latter is almost three times less, and the declining is more slowly and stable. According to the statistics, the weakest sectors of Australia are mining and construction. As for China, the spheres demanding particular attention are service sector, manufacturing, fixed-asset investment and export.