Visiting customers, officials and other economists in Hong Kong and Singapore in the past week, three insights about China were clear.
Firstly, there is a strong degree of confidence that China will implement stimulus packages to stabilise the economy following the slowdown in growth over the course of 2018.
The second big issue is around trade policy.
Clearly, there is great degree of uncertainty as to exactly how the trade negotiations with the US will get resolved and few people were particularly confident a compromise is in sight in the near term.
Finally, China seems to be heading towards a current account and trade deficit. The concern would be if China tried to take some direct steps to deal with that problem, particularly around students and tourists, which could be damaging to Australia’s economy if growth in arrivals slowed.
Given the size of China’s economy and Australia’s close trading relationship, how these developments unfold will be important in 2019.
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