http://www.couriermail.com.au/
PRIME Minister Kevin Rudd yesterday stepped up his rhetoric in relation to China and what he has now definitively called the end of the boom.
The halcyon days of ever rising commodity prices and demand for the things we dig out of the ground are finished; now comes the long, hard recalibration of an economy back to a broader, more sustainable footing was the line Mr Rudd prosecuted.
There may be an element of political overreach in the sense that while the peak of the boom appears to have well and truly crested, in historical terms the demand and price we receive for our commodity exports remains relatively healthy.
Coming off once in a generation highs to more sustainable levels does not constitute a crash after all, but it does give you the opportunity to paint yourself as the only party with clear policy to boost manufacturing, innovation and agriculture within a lower Aussie dollar paradigm.
Mr Rudd, possibly Australia’s most renowned Sinophile, should be heeded though, for events in China in recent weeks give cause for some alarm in a country as dependent on their economic well-being as Australia is.
Of most immediate concern are renewed signs the country’s gigantic credit bubble is in danger of popping, rather than – as most China watchers hope – being deflated slowly as a rising middle class and domestic consumption replaces export driven growth and asset speculation.
In recent days events on interbank markets in China have caused considerable disquiet as short-term lending rates have soared amid an attempt by the Chinese Government to damp down the growth of the country’s shadowy secondary banking market – a market by some estimates worth as much as $5 trillion.
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