Quarterly Essay 54 Dragon's Tail: The Lucky Country After the China Boom

In "Dragon's Tail," Andrew Charlton explores the supercharged rise of China and considers Australia's future as the Chinese dragon stirs and shifts.
China's rise has been perhaps the most significant economic event in two centuries, occurring 100 times more quickly and on a scale 1000 times larger than Britain's Industrial Revolution. Since 2000, Australia has been an essential part of this transformation, providing the raw materials to feed China's frantic manufacture of steel vertebrae for everything from cars and trucks to railways, apartments and office towers. China's appetite for resources has made us richer than ever before, but it has also drained the competitiveness from many parts of our economy, leaving us vulnerable.
In "Dragon's Tail," Andrew Charlton shows that China's growth model is now reaching its limit, and the world's most populous economy faces a challenging transition. Whether China crashes, or crashes through, this will have dramatic implications for Australia, slowing the demand for our resources and forcing us to reassess the foundations of our wealth. Charlton looks at ways to revitalise the Australian economy and secure our prosperity in a changing world.
"Understanding China's growth model helps explain why australia has done so well in the twenty-first century. But it also explains why, at the same time, our economic anxiety is reaching a zenith: why holden is leaving, why the budget is in such an apparent quagmire, why house prices are soaring, why the dollar is so volatile. China's growth has brought us a windfall, but it is a precarious sort of prosperity." - Andrew Charlton, "Dragon's Tail"
Andrew Charlton is the author of "Ozonomics, Fair Trade for All" (written with Nobel laureate Joseph Stiglitz) and Quarterly Essay 44, "Man-Made World," which won the 2012 John Button Prize. From 2008 to 2010 he was senior economic adviser to Prime Minister Kevin Rudd. He previously worked for the London School of Economics and the United Nations and received his doctorate in economics from Oxford University, where he studied as a Rhodes Scholar.