In its annual Economic Survey, the Organisation for Economic Co-Operation and Development (OECD) highlighted the potential risks for Australia’s economic recovery from the COVID pandemic.
The report recognized Australia’s “pandemic recession” was milder than most OECD nations, but added that the recovery from the current Delta outbreaks will be “more gradual”.
Australia wants to be ‘on the same page’ as the US on China
But the relationship with China was pointed to as a likely threat to Australia’s economic fortunes.
It comes after an increasingly strained relationship between Beijing and Canberra including massive tariffs on key Australian exports, and a communication freeze between the two nations’ key diplomats.
“A ratcheting up of diplomatic tensions with China could also further weaken trade activity,” the OECD report said.
“Resolving trade tensions with China would boost export growth, but there is also the potential for diplomatic relations to further deteriorate.”
Albanese has ‘no comprehension’ of the importance of strategy
The survey recognised Australian exporters for their ability to diversify to other markets, but warned there was still a substantial dependence on the Chinese economy.
“Australia’s strengthened trade relationship with a rapidly-industrialising China has brought benefits for business, household and government incomes over recent decades,” the report said.
“Nonetheless, the increased concentration of export flows makes Australia more vulnerable to a future shock in the Chinese economy or import restrictions being imposed on additional commodities, such as iron ore.”
The report also urged Australia to adopt more ambitious climate targets and improve its emissions reduction capabilities by committing to net zero by 2050 and introducing a resource rent tax.
Quad leaders’ summit most ‘useful thing diplomatically the Biden administration could do’
“Australia is uniquely vulnerable to climate change, but it is also uniquely placed to benefit economically from global decarbonisation,” it said.
“Faster decarbonisation can bring significant economic benefits. As the driest inhabited continent on the planet… Australia is highly vulnerable to long term climate change and associated extreme events.
“The government’s forthcoming Long-term Emissions Reduction Strategy is an opportunity to articulate a more co-ordinated and ambitious climate-change policy that puts the national economy on the path to reaching net zero emissions as soon as possible and preferably by 2050.”
Quad leaders’ summit to be ‘pretty much solely about China’
It comes as Prime Minister Scott Morrison prepares to meet with US President Joe Biden in Washington later this month along with the other Quad leaders where China’s presence in the indo-pacific is expected to be on the agenda.
But weeks out from the meeting Mr Morrison has been urged by Opposition Leader Anthony Albanese to put climate change firmly on the agenda.
In an opinion piece published in The Australian Mr Albanese declared climate change will be the force underpinning Australia’s relationship with the United States under a Labor government.
“Australia’s action on climate change will shape whether our interests prosper in partnership with our neighbours and our US ally,” he said.

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