Chinese Resource Demand and the Natural Resource Supplier

Mardi Dungey, Renee Fry-McKibbin and Verity Linehan

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This paper provides empirical evidence on the effects of Chinese resource demand on the resource rich natural resource supplier using the example of Australia. A structural VAR model is used to examine the effects of Chinese resource demand, commodity prices and foreign output on the macroeconomy with a formally specified mining and resources exports sector. The key findings of the paper are that shocks to Chinese demand and commodity prices result in a sustained increase in commodity prices and mining investment and a positive impact on the resources sector. However, these shocks eventually lead to lower real domestic output with factors of production moving out of the non-resources sectors and into the resources sector, resulting in a fall in nonresource sector output which is not fully offset by the rise in resources sector output. The results also indicate some market power by the natural resource supplier.

Pages: 27 pages
Date: 2013-09
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Chinese resource demand and the natural resource supplier (2014)
Working Paper: Chinese resource demand and the natural resource supplier (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2013-54

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