Fearless of Trade War! Deputy Governor of Australia's Central Bank: Australian Enterprises Optimistic About Export Prospects to China

On Thursday this week, a senior official from the Reserve Bank of Australia (RBA) stated that Australian exporters are confident about the prospects for China's economic growth and believe that US tariffs may enhance the competitive edge of Australian exports in the Chinese market. Therefore, they are optimistic about the prospects for their businesses in China.

Confidence in China's Economic Growth

In a speech in Sydney, Andrew Hauser, Deputy Governor of the RBA, expressed his confidence during a recent trip to China that the Chinese government would take necessary measures to sustain economic growth.

China is by far Australia's largest trading partner, and its economic growth and industrial conditions are crucial to Australia's exports.

In early April this year, Hauser visited China and met with numerous Chinese organizations and Australian exporters. This visit coincided with the announcement by US President Trump of hefty tariffs on China, leading to a chill in Sino-US trade relations at that time.

Hauser said that during his trip to China, he found an extraordinary level of confidence in China's prospects and a belief that China would maintain a tough stance in the Sino-US trade war. Moreover, he observed that people did not expect China to resort to currency devaluation to help offset the impact of US tariffs on Chinese goods.

What particularly struck him wasthe optimism of Australian businesses about the prospects for their operations in China.

For instance, the steel and iron ore sectors are Australia's largest export industries to China. Hauser found that companies in these sectors believed that, in the short term, Australia's scale and cost advantages in iron ore relative to other producers were hardly threatened.

Hauser stated:

"What struck me was the optimism of most Australian companies about the prospects for cooperation with China. This optimism is underpinned by a rebound in market sentiment in early 2025 and the belief that [China] will 'do everything possible' to sustain the economy."

"In addition, [Australian exporters] also speculate that recent developments in trade policy may enhance their competitive position in the Chinese market."

However, he also pointed out that under the influence of US tariffs, some Chinese goods originally exported to the US may shift their markets to other countries, potentially exposing Australian businesses to fiercer competition from Chinese companies both domestically and overseas.

However, it is currently unclear how significant this impact will be, as there is very limited overlap between the goods and services produced by China and Australia.

The Reserve Bank of Australia judged that the development of the global trade situation would have a dampening effect on Australia's net inflation, which was one of the reasons for it to cut interest rates by 25 basis points on Tuesday and introduce more easing policies.