Philip Lowe: Australia's deepening economic relationship with China - opportunities and risks

Address by Mr Philip Lowe, Governor of the Reserve Bank of Australia, to the Australia-China Relations Institute, Sydney, 23 May 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you very much for the invitation to address the Australia-China Relations Institute. It is an honour for me to be here with so many China experts.

What happens in China is important to Australia, and to the broader global community. This is as true in the world of economics as it is in other areas. So we all have a strong interest in understanding China.

For some years now, China has been Australia's largest export destination. This is likely to remain so for the foreseeable future. China's share of global GDP is also likely to continue to rise as average living standards in China improve further. Given that China's population is roughly four times that of the United States, the Chinese economy will be roughly twice the size of the US economy when average per capita incomes in China reach just half those in the United States - something which should be achievable. It will take some time to get to this point, but it is clear that what happens in China matters to us all, and increasingly so.