Australia Contemplates the End of the Gold Rush

Australia Contemplates the End of the Gold Rush

Few countries have benefited more from China’s rise and the global commodities boom of the past decade than Australia. One of the only major economies to escape the global financial crisis without going into recession, Australia's newfound wealth and huge resource endowments have been major factors driving a marked increase in its strategic significance within the Asia-Pacific. However, with China's commodities demand experiencing a major fluctuation, concerns are rising that Australia's economy cannot sustain the current rate of expansion -- and that an economic bust could curtail the country's integration with Asia.

For a country so long defined by its remoteness, Australia's integration into the Asia-Pacific has evolved remarkably rapidly. Trade with Asia has more than doubled in the past decade and now accounts for some 55 percent of total trade (.pdf). China has been the main catalyst of this trend, accounting for just less than one-third of Australia's trade with the region as a whole in 2011. Moreover, more than 80 percent of trade with China is now based on primary resources, predominantly coal and iron ore.

Rising economic cooperation with Asia and steady diplomatic efforts have helped Australia reorient away from its traditional status as a barren, colonial outpost. Part of this process has been cultural, with explicit attempts to modernize the state's relationship with both indigenous Australians and the British Commonwealth. Immigration from Asia has also accelerated, with the number of Asian-born residents having doubled since 2000, further driving change in Australian society.

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