Manufacturing News

Resource-intensive manufacturing not sustainable for growth

Wall Street economist, Stephen Roach has told ABC’s Lateline that while Australia is well-positioned to sustain the current growth model in China, industry and government need to recognise that the current resource-intensive, manufacturing-led growth model is not a sustainable one, even for China.

Roach said that despite this, the industry won’t be seeing China “capitulate” its manufacturing-led, resource-intensive growth model.

However, over the next five to 10 years, there is “going to be a very different mix of economic output for China than Australia and other resource exporters are used to, and I think Australia needs to be certainly mindful of that important shift in the mix and composition of GDP growth going forward,” Roach told Lateline.

One possible way for Australia to diversify GDP growth is to look at other markets for sourcing raw materials.

“… I think Australia certainly needs to be more diversified in the sources of its external demand as well as the sources of its own GDP growth. It’s always risky for any economy, whether it’s Australia, the United States or China, to put too many of its eggs in one basket,” Roach said.

To read the full transcript of the Lateline interview with Ali Moore, click here.

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