This is what the mining boom has given you.
The bubble chart below shows exports to China for each state and territory from 1988 to September 2013, according to ABS figures released last week.
It shows Western Australia has earned more than $300 billion in exports to China from the boom, eclipsing fellow mining state Queensland’s comparatively modest return over the same period.
Use the arrows to see how each state and territory has grown over time – and how WA came to dominate the rest.
Source: ABS International Trades and Services, Australia
WA’s windfall has come from China’s irrepressible appetite for iron ore to power its rapid industrialisation.
Government figures show nearly all (97 per cent) of Australia’s iron ore production comes from Western Australia, accounting for $38 billion out of Australia’s total of $73 billion in exports to China last year.
“Thank China, thank Western Australia, and thank iron ore,” says Commsec’s chief economist Craig James.
Western Australia dominates Australia’s export markets to China.
The figures show the transition in the mining boom from an investment phase to an export phase is still lucrative, providing a benefit even to non-Western Australians through super fund investments and the high Aussie dollar, he said.
But that high dollar has in turn hurt other exporters elsewhere in the country. “WA will argue their tax revenue is taken away to pay for poorer states, but other stats will say ‘our industries are going to the wall because of you’,” says AMP Capital’s Shane Oliver.
It’s a lopsided equation that has produced the two-speed economy and an east-west divide in export potential for as long as phase two of the boom – the export phase – lasts. After that, Mr James says we could see a return to phase one, in which demand ramps backs up to a level that spurs investment in building new mines.
Mr Oliver sees a lack of a clear plan for where the Australian economy goes after China, short of simply looking for the next big, industrialising economy in need of raw materials. “That seems to be what we do,” he said.
The BRICS bloc of rapidly emerging economies, comprising Brazil, Russia, India, China and South Africa, might offer some opportunities as they expand. This chart shows our exports to BRICS compared with exports to BRIS, or those nations minus China.
Exports to emerging markets in Brazil, Russia, India and South Africa are dwarfed by exports to China.
It shows the extent to which the Chinese market has outpaced other developing nations. But it also gives a hint as to how unique this boom has been.
Other economies have inflation and deficits to grapple with, as well as resource stockpiles of their own, making them less likely to provide the cash bonanza on offer from Beijing for the last decade and through the next.
The longer-term challenge for the Australian economy will be how – or perhaps if – we can capitalise on selling products and services, not just resources, to those markets as their cashed-up consumers emerge.
In other words, how we can dream up, as well as dig up, new opportunities.