Photo by CDE Global on Flickr.
Peter Drysdale looks at African competition in China's market for iron ore in East Asia Forum. The boom in resource prices, fuelled by China's surging industrialisation and steel demand over the past couple of decades, has lifted Australia's terms of trade to a 100-year high. Resource exporters around the world have been enjoying good times. Australia's terms of trade are 65 per cent above the average twentieth-century level and 85 per cent above the trend seen in the twentieth century, had that continued. As a result, Australian gross domestic product in nominal terms is about 13 per cent higher than it would have been without these relative price changes. What goes up, of course, must also come down. A gigantic global supply response to booming resource prices is already under way.
TO READ THIS ARTICLE, CREATE YOUR ACCOUNT
And extend your reading, free of charge and with no commitment.
