China slowdown ‘will hit Australia’ – World Bank

FXStreet (Mumbai) - The slowdown in China will negatively affect Australia as lower prices for export commodities has effected investment in mining and weakened the Australian dollar, the World Bank said in its fresh East Asia and Pacific Economic Update report released on Monday. China is Australia’s biggest trading partner.

The bank noted in the report, "The significant negative impact on Australia and New Zealand, among the world’s largest commodity suppliers, would lead to indirect spillovers on the Pacific Island countries, given their tight links through trade, investment and aid,"

"In China, as it shifts to a consumption-led, rather than an investment-led, growth model, the main challenge is to implement reforms that will ensure sustainable growth in the long run."

The World Bank's warning came as fresh Chinese trade figures underlined its conclusions. Exports were down 14.6% in March, measured year-on-year, while imports fell 12.3%.