AUSTRALIA is lucky to have a powerful trading partner such as China given the current economic situation.
That was the basis of Economics and Beyond chief economist Jeff Oughton's presentation at the GRDC Farm Business Updates in Merredin last week.
Speaking about macro-economic and financial outlooks, Mr Oughton said there were great opportunities for Australian agribusiness and it was important to make the most of the Asian century.
Mr Oughton said although global economic growth is too slow and uneven, and finances are still unstable and uncertain following the Global Financial Crisis of 2009, China and Asia are still experiencing relatively strong growth which is critical for Australia in the medium to long term.
Mr Oughton said while Chinese activity had moderated in recent years, authorities were looking to rebalance from over-investment towards consumer spending and to sustain 7-8pc growth over the medium-term.
"Get up in the morning and say go China," Mr Oughton said.
"WA knows this better than anybody.
"Red gold (iron ore) as well as yellow gold in the form of wheat and dairy have seen a major investment boom.
"Chinese plans aren't to grow at 10pc anymore, they are to grow at 7.5pc.
"So say thank you because that is what we are leveraged to."
In the context of global financial recovery, Mr Oughton said financial indicators of risk and return indicated signs of improvement.
"That fear index is at much lower levels, what you want to see is some restoration of confidence and some leading indicators that business is getting going, and you are seeing that," he said.
"You also want global trade pickup, and you are seeing some of this in the big picture from China.
"They are emerging and are taking farmers into factories and selling things to the world at cheaper prices and pinching market share.
"Australia is on the back of that because we are selling them the things they need to do that."
Mr Oughton said a structural rise in the demand for food was a significant opportunity for Australia.
"There is a great opportunity for Australian agribusiness, you can get your wheat into a good port and onto a boat out to Asia very quickly," he said.
"The challenge is accessing the land and optimising the water use.
"Farm production is only going ahead at a rate of about 3pc per annum in Australia.
"China is growing at 8pc and they are getting hungry, we have to lift our game to make the most of this opportunity."