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Australia News Live: Labor Introduces New Changes To Workplace Bill; Penny Wong Offers To Brief Parliament On China

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Australia News Live: Labor Introduces New Changes To Workplace Bill; Penny Wong Offers To Brief Parliament On China

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Australia News Live: Labor Introduces New Changes To Workplace Bill; Penny Wong Offers To Brief Parliament On China

RBA beats estimates as clouds gather over China

As mentioned in an earlier article, the Deputy Governor of the Reserve Bank , Michelle Bullock , gave a speech in the evening to emphasize that inflation will peak again soon, possibly early next month.

Despite the impact of the floods on agriculture, food prices are rising and the full impact of energy prices continues to affect many homes and businesses.

Meanwhile, the RBA will be ahead of Senate estimates this morning (after the ACCC began work on the Treasury portfolio). So expect more talk about whether the central bank should have acted more quickly to control inflation so it didn’t find itself caught in a tailspin. Now brake very hard. (They revise their models and correctly say that most economists did not pick the Russian war, etc.)

One thing to watch is the deterioration of the Chinese economy amid the collapse of the property market and the deadlock of the Covid-zero policy.

As we noted in August, the Chinese economy is showing signs of a significant slowdown.

Let’s not forget this remarkable statistic from Peking University economist Michael Pettis *: China’s GDP is about three-quarters that of the United States and Europe, but its real estate asset value is double that of the United States and three times that of Europe. The mother of all housing bubbles, it seems.

However, as we learned yesterday, producer prices in China fell last month for the first time in nearly two years, in stark contrast to the rest of the world. Inflation does not bode well for the health of the domestic economy.

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Unsurprisingly, Bullock called China the biggest uncertainty in the international economy.

“From our perspective, the downside risk in China is a big concern,” he said, referring to the underlying real estate problem.

bull said:

Residential home sales have fallen sharply over the past year and housing starts were also the weakest in more than a decade.

Australia will feel the crisis most directly through falling iron ore prices, but as China is the biggest consumer of other mined stuff, the impact could be greater.

However, an influx of goods that cannot be sold domestically will ease price pressures in Australia and elsewhere.

* “Peking University” is the official English name in case you’re wondering why it’s not “Peking University”.

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