Clearly what happens in the Australian economy is now more dependent upon what happens in China than has been the case at any time in our past. Graph 4  But as we think about the future, the story is broader than China.
Over the years ahead, the Indian economy, which also contains more than 20 per cent of the world’s population within its borders, is likely to become increasingly important to Australia. After India grew at a disappointing pace in the 1960s and 1970s, growth has picked up over recent decades, averaging 7 per cent per year over the 2000s (Graph 5).