Looks like anyone who throws in their lot with China thrives, who who oppose it perish. The Aussie dollar has replaced the Swiss franc as the world's fifth most traded currency * Larry Elliott, economics editor * The Guardian, Saturday 6 November 2010 Like Germany, Australia is a beneficiary of China's explosive growth. But while Beijing needs Europe's economic powerhouse to tool up its factories with hi-tech equipment, it also needs a bountiful supply of raw materials. Australia has metals, coal and food in abundance. In the past six years, its exports to China have quadrupled, continuing to rise even during the Great Recession of 2008-09.China is comfortably Australia's biggest market. The economic links between China and Australia have become so strong that the Aussie dollar is now used by many foreign exchange dealers as a proxy for the yuan, a guide to where the Chinese currency would be trading were Beijing to remove its restrictions. Growth is expected to be about 4% this year and next, while unemployment is just above 5% "The country is on fire," said Nick Parsons, strategist at National Australia Bank. "It went into the crisis with a very strong fiscal position, which allowed the government to hand a $900 (£560) cheque to every one of the 16 million adults living in the country. And it helps when you can dig a hole and sell to China what you find on the end of your shovel." http://www.guardian.co.uk/business/2010/nov/06/australia-economic-growth
And completely different monetary policy to that in the USA. On Tuesday the RBA increased the overnight cash rate by 25 bps, from 4.50% to 4.75%.