China, expected to be the world's fastest growing economy in 2009, is crucial to help Australia avoid a technical recession, Federal Treasurer Wayne Swan said on Tuesday.
"As our second-largest trading partner in 2008, China is of particular importance to the Australian economy," Swan said at a conference on China at the Australian National University in Canberra.
"Both China and Australia have bright economic futures, which will reinforce each other as our trade and economic relationship develops.
"Through developing our relationship with China, Australia will be better placed to meet the rising demands of the Chinese economy as China assumes an increasingly greater role in the global community," he said.
While Chinese economic growth had slowed, it was still expected to be the fastest growing major economy this year.
This helped Australia avoid a technical recession in the March quarter, when other economies were going backwards, Swan said.
In the six months to the March quarter, Australian export volumes increased by 1.8 percent, while exports from the United Kingdom, France, Canada and the U.S. fell more than 10 percent.
"A common factor behind Australia and China's resilience to the impact of the global recession has been our macroeconomic policy responses.
"Both countries implemented large stimulus packages at crucial times to support growth, and infrastructure investment has been a key feature in both our stimulus packages," he said.
Australia was in a good position to support China in reforming its financial system, Swan added.
"We have a freely floating exchange rate, significant financial reform experience, and resilient financial sector and clear and effective regulation."
Discussions were continuing on a possible free trade agreement with China which could help underpin a further expansion of the commercial relationship and a stronger strategic partnership between the two nations.
(Xinhua News Agency July 14, 2009)
