Reserve Bank of Australia board member John Edwards today said the country’s mining boom will burn bright for the next 10 years, then slow to more average rates of growth.
In a note written for the Lowy Institute, a foreign affairs think tank, he said the boom means business investment is set to grow strongly and will account for 20 per cent of the nation’s output.
“Business investment this financial year as a whole will be more than a third higher than last year, and next year it will be higher by another third,” he said.
“It will soon account for nearly one-fifth of Australian output.”
He said China, Australia’s biggest trading partner, is moving up the production chain to products requiring higher levels of skills.
“Now the world’s largest exporter of manufactures and the world’s second-largest economy, China is losing the advantages of coming from behind, particularly the advantages of applying cheap labour and cheap capital to readily available technologies.”