The wealth and hence the prosperity of Australia depend on mining, which unfortunately is not evenly distributed in every state. The non-mining states at present benefited from the flow-on effect of their good neighbours. Manufacturing in Australia was once the largest employer has now become a non-issue in terms of employment. Excessive reliance on just one major client, China, for our coal and iron ore export, can be seen as a big marketing and business risk.
China has been paving her ways to acquire fuel and resources from various parts of the globe, and this will enable China to hold the trump card in future price negotiation with Australia for coal and iron ore.
Closer examination of China mineral reserves, one will realise that she is using cheap supplies from other countries until their depletion, and by which time, it will be more economical for China to start digging her “backyard”.
Unlike China, progress of India is hindered by the entrenchment of religious believes, and non-centralised governmental system. While India has an advantage at present to be an English-speaking nation, and thus taking the lead in call-centres, IT consulting; such good time will not last long, as the speed of training the Chinese to learn English is progressing fast - mainly due to economy of scale.
To take advantage of Chinese low labour cost, many countries stupidly dig their own graves by helping China to develop at lightning speed as a result of transferring technologies, which cost millions and billions of dollars and many years of research and development. China will be more than just the factory of the world; she will also be the “office” of the world when white collar or office works are outsourced off-shore to China.
Should the mineral prices go down, office employment outsourced, the Australian economy will decline. The non-mining states will experience the biggest negative impact. The scenario will not be very different from the current situation in America.