A Bamboo Curtain: The Grim Australian Consequences of China Conflict

Rodney Tyers and Yixiao Zhou
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Yixiao Zhou: Crawford School of Public Policy, Centre for Applied Macroeconomic Analysis (CAMA), Australian National University

No 22-20, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: The Australian economy has benefited from several decades of extraordinary Chinese expansion. Slowing growth has diminished these gains and geopolitics between China and the Western democracies has seen restricted commerce between China and Australia. We use a global economic model to assess the consequences were these tensions to restrict all inter-state commerce. Bilaterally, effects on Australia are large and proportionally larger than those on China. A “bamboo curtain”, restricting all commerce between Western democracies and other regions, would see Australia’s welfare per capita impaired most and the US least because of differences in trade dependence.

Keywords: Trade and financial blockade; general equilibrium analysis; China; Australia (search for similar items in EconPapers)
JEL-codes: D33 E52 J11 O33 (search for similar items in EconPapers)
Pages: 30
Date: 2022
New Economics Papers: this item is included in nep-cna and nep-int
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