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Austin, TX (ZPRYME NEWS) – 05/23/08 - Australia’s economy soared to 14 percent last year due primarily to the rapid industrialization of China and its need for Australia’s iron ore. With this, the Australian economy, particularly that of Western Australia’s mining and fuel industry, is experiencing a boom.

According to China Economic Net on “China to become Western Australia’s No. 1 trading partner in ten years”, China will continue to be Western Australia’s largest trade partner for the next five to ten years. China Economic Net added that Western Australia, which accounts for 10 percent of the population of Australia and 30 percent of its land area, is able to contribute at least 33 percent of the total exports of Australia and accounts for more than 50 percent of the exports of Australia to China in particular.

According to David Lague on “Western Australia reaps huge profits from Chinese boom”, the export of resources, especially on iron ore from Western Australia, to China has increased to 13.8 billion dollars since 2003. In fact, during the second quarter of Western Australia’s economy, the growth rate increased to 14 percent from the previous year. This even surpassed the 11.3 percent growth in China for the same year. In addition to China, Western Australia still caters to the demands of traditional partner markets such as Japan and South Korea.

Likewise, in the Economist on “Western Australia, Diggers for China”, the Australian National University and Rio Tinto, through a report conducted by economists Ross Garnaut and Ligang Song, said that by the year 2020, the demand of China for more metal products may increase to a value that may equal that of the total annual demand of the industrial world at present.

With this in mind, two of the mining giants, BHP Billiton and the Rio Tinto, seek to increase their contract prices from 50 to 70 percent which, according to both companies, is reasonable since their shipping cost is thrice lower than those charged by Brazil which is their main competitor.

By

Zpryme: Emerging Markets Group

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