Reserve Bank of Australia's Christopher Kent, Assistant Governor (Economic)

  • Our central forecast is China will see further gradual moderation in growth over next few years
  • Chinese policy so far has tended towards more accommodative policy settings, may raise risk of future disruptive adjustment
  • We should be alert to the risk of adverse developments that could lead to a sharp economic slowdown in China
  • Chinese authorities are attentive to these risks and have the scope to respond if needed
  • For Australia, primary risk posed by the uncertain outlook in China is to commodity prices and exports
  • A weaker AUD in response to negative developments in external conditions could be expected to act as a buffer
  • Longer term, lots of room for further development in Chinese economy, which will provide Australia with many opportunities

Headlines via Reuters

Text: The Economic Transition in China

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On this ... "For Australia, primary risk posed by the uncertain outlook in China is to commodity prices and exports"

OK. let's insert a cat amongst the pigeons.

Commodity prices have already collapsed.

So the risk is in the price already and there isn't much more downside to come.

Flame away.