Chinese resource demand and the natural resource supplier

Mardi Dungey, Renee Fry-McKibbin and Verity Linehan

No 17027, Working Papers from University of Tasmania, Tasmanian School of Business and Economics

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 non-resource 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.

Keywords: China; resource demand; commodity prices; mining investment; resources sector Speci?cation tests; weak instruments; bootstrap. (search for similar items in EconPapers)
JEL-codes: F41 Q30 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2013-07-01, Revised 2013-07-01
New Economics Papers: this item is included in nep-cul and nep-opm
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Citations: View citations in EconPapers (4)

Published by the University of Tasmania. Discussion paper 2013-07

Downloads: (external link)
http://eprints.utas.edu.au/17027/1/2013-07_Chinese_Resource_Demand.pdf

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:tas:wpaper:17027

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