It’s no secret that China’s once-roaring economy, while still impressive, has been slowing down in recent years.
This has led to many concerns about companies doing large amounts of business with the new Chinese middle class – a group that now outnumbers the whole of the US population.
Apple is one of the most high-profile victims recently, who are relying on Chinese imports of iPhones and iPads to grow their bottom line. Stagnating sales have led to surprise share price falls recently not just for Apple for a range of other luxury-goods producers making inroads into the competitive Chinese market.
However it’s important to remember that we live in a global economy, with factors in one country having knock-on effects in many others. And the bigger the economy, the bigger the impacts. Which means that changes in the Chinese economy are being felt on a global scale.
Perhaps most interestingly it has recently become apparent that the shrinking Chinese economy is having a significant impact on expats in Australia; but how, and why?
You might not know it, but a major part of the Australian economy is mining for raw materials such as zinc, copper and coal. All these deposits occur in Australia’s rich soil in impressive volumes and have long been mined by an extensive population of local and expat workers.
Given the introduction to this article it should come as no surprise that Australia’s single largest customer for these minerals is China. Indeed, an estimated 54% of Australia’s entire mining output is now shipped to China – the largest single importer of such commodities in the world.
There are two problems affecting Australian mining firms; besides the falling demand for such raw materials, the economy is also being affected by the consequent falling prices of such commodities. This means both selling less, and doing so at cheaper prices in the recent past.
Over the past few months commentators point out that the giant mining companies have sought to offset this falling income by ramping up production. Sadly, as might be expected in a world of supply-and-demand, this has further impacted the situation, creating a “perfect storm”.
Now it seems that a critical threshold has been reached, with many expat workers from the mining industry finding themselves increasingly struggling to hold on to gainful employment.
Mining is a famously volatile industry, with many staff hired only on temporary contracts for specific tasks, so as these contracts are coming to an end an increasing number of workers are finding their contracts not being renewed. And with no employment opportunities in sight, ever more expats are finding it necessary to leave behind the Australian dream and head home.