1 00:00:02,720 --> 00:00:05,040 Speaker 1: My name is Lily Maddon and I'm a proud Arunda 2 00:00:05,240 --> 00:00:10,040 Speaker 1: Bunjelung Calcuttin woman from Gadighl Country. The Daily oz acknowledges 3 00:00:10,119 --> 00:00:12,320 Speaker 1: that this podcast is recorded on the lands of the 4 00:00:12,320 --> 00:00:15,880 Speaker 1: Gadighl people and pays respect to all Aboriginal and Torres 5 00:00:15,880 --> 00:00:18,799 Speaker 1: Strait Island and nations. We pay our respects to the 6 00:00:18,800 --> 00:00:21,599 Speaker 1: first peoples of these countries, both past and present. 7 00:00:28,880 --> 00:00:31,560 Speaker 2: Good morning, and welcome to the Daily os. It is Wednesday, 8 00:00:31,640 --> 00:00:35,960 Speaker 2: the twelfth of October. I'm Sam and I'm Tom. China's 9 00:00:36,080 --> 00:00:40,839 Speaker 2: economy is facing its biggest threat forward decades, but unlike 10 00:00:41,000 --> 00:00:43,760 Speaker 2: most other countries, its problems have nothing to do with 11 00:00:43,920 --> 00:00:47,360 Speaker 2: rising prices. Tom, I'm going to be calling on you 12 00:00:47,479 --> 00:00:49,640 Speaker 2: to help us figure out what is going on here 13 00:00:49,720 --> 00:00:52,760 Speaker 2: and what it means for us in Australia. But first, 14 00:00:53,080 --> 00:00:54,480 Speaker 2: what's making headlines this morning? 15 00:00:55,680 --> 00:00:58,680 Speaker 3: Well, Sam, Today marks twenty years since the Barley bombing 16 00:00:58,800 --> 00:01:02,160 Speaker 3: terrorist attack that killed over two hundred people, including eighty 17 00:01:02,200 --> 00:01:05,360 Speaker 3: eight Australians. It was the largest loss of Australian life 18 00:01:05,400 --> 00:01:08,680 Speaker 3: from a terrorist attack. A memorial service will be held 19 00:01:08,720 --> 00:01:11,240 Speaker 3: in Canberra this morning, and a ceremony will take place 20 00:01:11,280 --> 00:01:13,880 Speaker 3: at the Australian Consulate General in Bali. 21 00:01:15,360 --> 00:01:17,040 Speaker 2: Got some news for you, tom that'll make you a 22 00:01:17,080 --> 00:01:20,160 Speaker 2: bit hot and bothered under your economics Colar Treasurer Jim 23 00:01:20,240 --> 00:01:23,120 Speaker 2: Chalmers has warned that the world is bracing for another 24 00:01:23,280 --> 00:01:26,560 Speaker 2: global downturn and that the possibility of a recession in 25 00:01:26,560 --> 00:01:30,479 Speaker 2: the world's major economies has shifted from possible to probable. 26 00:01:30,959 --> 00:01:33,840 Speaker 2: Charmers said that the downturn would come from continued rises 27 00:01:33,880 --> 00:01:36,360 Speaker 2: in inflation and would be the third in the last 28 00:01:36,440 --> 00:01:37,200 Speaker 2: fifteen years. 29 00:01:38,920 --> 00:01:41,839 Speaker 3: Victorians in flood prone areas have been told to ready 30 00:01:41,880 --> 00:01:45,680 Speaker 3: themselves for seventy two hours in isolation, with roads set 31 00:01:45,720 --> 00:01:48,200 Speaker 3: to be cut off due to expected flooding across the state. 32 00:01:48,480 --> 00:01:50,560 Speaker 3: Premier Daniel Andrews said there will be flood risks in 33 00:01:50,600 --> 00:01:54,760 Speaker 3: lots of different places with rainfall expected to peak tomorrow. 34 00:01:55,280 --> 00:01:58,440 Speaker 2: And why do we end today's news bulletin with some 35 00:01:58,480 --> 00:02:01,320 Speaker 2: good news from NASA their helping a new battery that 36 00:02:01,360 --> 00:02:04,880 Speaker 2: could be used to power a fully electric aeroplane. The 37 00:02:04,920 --> 00:02:08,240 Speaker 2: battery is lighter, safer, and better performing than the lithium 38 00:02:08,280 --> 00:02:11,480 Speaker 2: ion batteries currently in use across the industry, and they 39 00:02:11,520 --> 00:02:15,360 Speaker 2: also don't contain liquids that cause overheating and fires, which 40 00:02:15,400 --> 00:02:19,720 Speaker 2: is always a good thing. All right, So Tom, today 41 00:02:19,720 --> 00:02:22,200 Speaker 2: on the podcast, we're going to be talking about China. Now, 42 00:02:22,240 --> 00:02:24,680 Speaker 2: I know this is going to be an economic discussion, 43 00:02:24,800 --> 00:02:27,440 Speaker 2: but let's do them out for a sec. How is China. 44 00:02:27,560 --> 00:02:29,920 Speaker 3: China's in a bit of trouble, Sam, It's something that 45 00:02:29,960 --> 00:02:32,800 Speaker 3: we haven't spent that much time talking about, but it 46 00:02:32,880 --> 00:02:36,840 Speaker 3: is a growing area of concern. So, China's economy has 47 00:02:36,880 --> 00:02:41,240 Speaker 3: been growing rapidly for really thirty years. And when I 48 00:02:41,240 --> 00:02:44,919 Speaker 3: say rapidly, it's been quite extraordinary what's happened in China. 49 00:02:45,000 --> 00:02:48,960 Speaker 3: China has completely transformed itself over the last three decades. 50 00:02:49,000 --> 00:02:51,160 Speaker 3: So you go back to nineteen ninety China was mostly 51 00:02:51,400 --> 00:02:55,600 Speaker 3: a rural economy, mostly based on agriculture. It was fifteen 52 00:02:55,600 --> 00:02:59,120 Speaker 3: times smaller than America. Now it's almost as big as America. 53 00:02:59,240 --> 00:03:01,600 Speaker 3: It was eight times smaller than Japan. Now it's three 54 00:03:01,680 --> 00:03:04,280 Speaker 3: times as large as Japan. So it's been this enormous 55 00:03:04,840 --> 00:03:08,320 Speaker 3: change in China as it has kind of industrialized. It's 56 00:03:08,360 --> 00:03:12,160 Speaker 3: resulted in tens of millions of people moving from country 57 00:03:12,200 --> 00:03:14,880 Speaker 3: to city, and that growth has been good news not 58 00:03:15,040 --> 00:03:18,200 Speaker 3: just for China, but good news for just about everyone 59 00:03:18,200 --> 00:03:20,480 Speaker 3: in the world, anyone that does business with China, anyone 60 00:03:20,560 --> 00:03:24,320 Speaker 3: that sells things to China, including Australia, and that growth 61 00:03:24,320 --> 00:03:27,040 Speaker 3: has been kind of taken for granted a little bit. 62 00:03:27,080 --> 00:03:28,839 Speaker 3: I think it's something that has just been a part 63 00:03:28,840 --> 00:03:31,640 Speaker 3: of the world for thirty years. There have been some 64 00:03:31,760 --> 00:03:34,639 Speaker 3: warnings over the last few years that that growth might 65 00:03:34,680 --> 00:03:37,720 Speaker 3: start to slow, but now we're worried it might not 66 00:03:37,920 --> 00:03:40,880 Speaker 3: just slow, but might stop altogether. There are lots of 67 00:03:40,920 --> 00:03:43,360 Speaker 3: reasons at the moment that we're concerned China might be 68 00:03:43,360 --> 00:03:45,480 Speaker 3: about to go into decline. And so what that will 69 00:03:45,520 --> 00:03:47,880 Speaker 3: mean for China and what that will mean for the 70 00:03:47,920 --> 00:03:49,560 Speaker 3: rest of the world is what I want to talk 71 00:03:49,560 --> 00:03:50,120 Speaker 3: about today. 72 00:03:50,520 --> 00:03:52,480 Speaker 2: Well, there's some really big questions there, Tom and we're 73 00:03:52,520 --> 00:03:54,640 Speaker 2: going to dive into that in a second, But first 74 00:03:54,680 --> 00:03:56,560 Speaker 2: I want to talk about how we measure all of 75 00:03:56,560 --> 00:03:59,520 Speaker 2: this stuff and what growth actually is. We talk about 76 00:03:59,640 --> 00:04:02,400 Speaker 2: China's growth speeding up and slowing down. What do you 77 00:04:02,440 --> 00:04:03,240 Speaker 2: mean by all of that? 78 00:04:03,560 --> 00:04:05,640 Speaker 3: Yeah, so it's a good place to start with, you know, 79 00:04:05,680 --> 00:04:07,960 Speaker 3: what is growth? Because I think we do sometimes take 80 00:04:08,000 --> 00:04:10,480 Speaker 3: that for granted a bit. So when we talk about growth, 81 00:04:11,000 --> 00:04:14,280 Speaker 3: we're talking about the economic activity in a country, so 82 00:04:14,560 --> 00:04:17,640 Speaker 3: what it makes, or to put it another way, what 83 00:04:17,720 --> 00:04:20,720 Speaker 3: it has, the resources it has, How wealthy a country is. 84 00:04:21,279 --> 00:04:24,360 Speaker 3: We talk about how quickly that is growing, and that's 85 00:04:24,400 --> 00:04:26,320 Speaker 3: not the only thing that we care about. We care 86 00:04:26,440 --> 00:04:29,880 Speaker 3: a whole lot about how a country's wealth is distributed, 87 00:04:29,960 --> 00:04:32,760 Speaker 3: not just how fast it grows, but who has that wealth. 88 00:04:32,960 --> 00:04:36,400 Speaker 3: We care about the environmental impacts of that economic activity, 89 00:04:36,440 --> 00:04:39,440 Speaker 3: We care about health outcomes, education outcomes. So you know, 90 00:04:39,480 --> 00:04:42,480 Speaker 3: we shouldn't always just focus on growth. But generally speaking, 91 00:04:42,680 --> 00:04:45,080 Speaker 3: the reason that we spend so much time talking about 92 00:04:45,120 --> 00:04:48,479 Speaker 3: economic growth is that it goes hand in hand with 93 00:04:48,560 --> 00:04:51,120 Speaker 3: the living standards of the people who live in a country, 94 00:04:51,440 --> 00:04:54,279 Speaker 3: and so we focus on how fast and how much 95 00:04:54,360 --> 00:04:57,320 Speaker 3: an economy has grown as a measure of whether living 96 00:04:57,360 --> 00:05:01,160 Speaker 3: standards in a particular country are improving. And for most 97 00:05:01,200 --> 00:05:03,560 Speaker 3: of human history, the answer was it just never happened. 98 00:05:03,600 --> 00:05:06,640 Speaker 3: Growth wasn't really something that for thousands of years, was 99 00:05:06,680 --> 00:05:10,480 Speaker 3: even a thing. For the most part, societies were kind 100 00:05:10,520 --> 00:05:14,000 Speaker 3: of agricultural or they'll trade kind of very simple goods. 101 00:05:14,040 --> 00:05:18,240 Speaker 3: There wasn't much material improvement in people's standard of living 102 00:05:18,400 --> 00:05:22,120 Speaker 3: for thousands of years. That started to change with the 103 00:05:22,200 --> 00:05:26,800 Speaker 3: rise of factories what we call industrialization, where sort of 104 00:05:26,800 --> 00:05:29,560 Speaker 3: starting in Britain but then spreading to a lot of 105 00:05:29,560 --> 00:05:32,680 Speaker 3: different countries in the world, we learned how to produce 106 00:05:32,760 --> 00:05:37,279 Speaker 3: things on a broader scale. That basically took us from 107 00:05:37,360 --> 00:05:40,920 Speaker 3: that world of farming and simple trade to the world 108 00:05:40,960 --> 00:05:43,840 Speaker 3: that we live in today. And now growth and kind 109 00:05:43,880 --> 00:05:46,880 Speaker 3: of constant improvement in our living standards is something that 110 00:05:46,920 --> 00:05:49,919 Speaker 3: we've come to expect. So many countries in the West, 111 00:05:49,960 --> 00:05:52,920 Speaker 3: what we call developed countries, they've gone through that period 112 00:05:53,000 --> 00:05:58,360 Speaker 3: of transition from farming towards factories and manufacturing, and increasingly 113 00:05:58,400 --> 00:06:01,880 Speaker 3: towards kind of white jobs that are more common today. 114 00:06:02,720 --> 00:06:06,640 Speaker 3: When we talk about developing countries like China, they're countries 115 00:06:06,640 --> 00:06:08,880 Speaker 3: that are currently going through that process. And China's gone 116 00:06:08,920 --> 00:06:12,479 Speaker 3: through it extremely rapidly over the last thirty years. And 117 00:06:12,520 --> 00:06:14,279 Speaker 3: I guess I'm talking in an abstract way, but to 118 00:06:14,279 --> 00:06:16,000 Speaker 3: talk about what that actually means, you know, in China, 119 00:06:16,040 --> 00:06:19,039 Speaker 3: it's literally been city's been created out of thin air, 120 00:06:19,160 --> 00:06:21,240 Speaker 3: tens and tens of millions of people, as I say, 121 00:06:21,279 --> 00:06:25,480 Speaker 3: moving from from country to city. As China has massively 122 00:06:25,520 --> 00:06:28,360 Speaker 3: scaled up its industrial production, you think of the kind 123 00:06:28,360 --> 00:06:31,320 Speaker 3: of the made in China stereotype. That's the story of 124 00:06:31,400 --> 00:06:34,360 Speaker 3: Chinese growth. And as I say, you know, Australia sells 125 00:06:34,400 --> 00:06:36,880 Speaker 3: a lot of things to China. It sells iron ore 126 00:06:36,960 --> 00:06:39,400 Speaker 3: and steel and things that China has used to develop 127 00:06:39,440 --> 00:06:42,360 Speaker 3: that capacity. The whole world has benefited from this period 128 00:06:42,360 --> 00:06:45,360 Speaker 3: of rapid growth in China. So it's a really significant 129 00:06:45,480 --> 00:06:46,359 Speaker 3: global story. 130 00:06:46,760 --> 00:06:48,960 Speaker 2: And so do I have it right in that there's 131 00:06:49,120 --> 00:06:52,880 Speaker 2: slowing growth in China because they're not producing as much 132 00:06:53,000 --> 00:06:55,160 Speaker 2: or they're not doing it as well. Is that kind 133 00:06:55,200 --> 00:06:57,440 Speaker 2: of what's happening something along those lines. 134 00:06:57,480 --> 00:07:02,279 Speaker 3: Yeah. So economists in general have this view that when 135 00:07:02,320 --> 00:07:05,760 Speaker 3: you do that process of industrialization, when you're starting from scratch, 136 00:07:06,160 --> 00:07:09,200 Speaker 3: you'll grow very fast early on as you're kind of 137 00:07:09,240 --> 00:07:11,880 Speaker 3: you know, building cities and building factories, and then it's 138 00:07:11,920 --> 00:07:13,720 Speaker 3: going to start to slow. And that's what we've seen 139 00:07:13,760 --> 00:07:16,280 Speaker 3: in kind of most most developed countries. We've seen you know, 140 00:07:16,320 --> 00:07:18,320 Speaker 3: we still grow here in Australia, but it's a lot 141 00:07:18,360 --> 00:07:20,400 Speaker 3: slower than what it would have been when we were 142 00:07:20,400 --> 00:07:23,920 Speaker 3: developing that kind of capacity. And so economists have been 143 00:07:23,960 --> 00:07:26,560 Speaker 3: warning for a while that China's growth it can't keep 144 00:07:26,560 --> 00:07:28,520 Speaker 3: growing this fast forever. You know you're going to run 145 00:07:28,520 --> 00:07:31,480 Speaker 3: out of new cities to create eventually that eventually growth 146 00:07:31,520 --> 00:07:34,520 Speaker 3: in China would start to slow. But I guess the 147 00:07:34,560 --> 00:07:38,560 Speaker 3: problem now is that there are some concerning things happening 148 00:07:38,560 --> 00:07:40,600 Speaker 3: in China that suggest it may not just kind of, 149 00:07:40,800 --> 00:07:43,000 Speaker 3: you know, gradually slow down like it's done elsewhere, but 150 00:07:43,040 --> 00:07:45,960 Speaker 3: could actually start to fall and could go backwards and 151 00:07:46,000 --> 00:07:47,720 Speaker 3: move in the other direction. I think that's what's got 152 00:07:47,800 --> 00:07:48,440 Speaker 3: us really worried. 153 00:07:48,920 --> 00:07:50,960 Speaker 2: Why don't we take a quick break. Here is a 154 00:07:51,000 --> 00:07:55,440 Speaker 2: quick message from our sponsors. So tell me about housing then, 155 00:07:55,480 --> 00:07:58,800 Speaker 2: because housing is always a good indication of how fast 156 00:07:58,920 --> 00:08:01,760 Speaker 2: an economy is growing in terms of as you said before, 157 00:08:01,840 --> 00:08:04,920 Speaker 2: new city has been created, but also that transition from 158 00:08:04,960 --> 00:08:09,520 Speaker 2: agricultural areas into urban centers. What's happening with housing in China. 159 00:08:09,760 --> 00:08:12,200 Speaker 3: Yeah, so housing is the perfect place to look really 160 00:08:12,400 --> 00:08:15,520 Speaker 3: to see what's happening at the moment in China. As 161 00:08:15,560 --> 00:08:18,600 Speaker 3: you say, that process of constructing new cities, it involves 162 00:08:18,600 --> 00:08:22,120 Speaker 3: building a lot of houses. So a housing boom in 163 00:08:22,240 --> 00:08:24,520 Speaker 3: China has been a big part of the story over 164 00:08:24,560 --> 00:08:27,680 Speaker 3: the last three decades. That boom looks like it's ended 165 00:08:28,320 --> 00:08:31,880 Speaker 3: and instead a crash could be looming. So China's got 166 00:08:31,920 --> 00:08:35,719 Speaker 3: a kind of a strange system for financing houses. They 167 00:08:35,720 --> 00:08:38,760 Speaker 3: do this thing called a pre sale, where banks kind 168 00:08:38,800 --> 00:08:41,560 Speaker 3: of work with developers to sell a house that hasn't 169 00:08:41,600 --> 00:08:47,240 Speaker 3: been built yet, but can essentially start charging for mortgage 170 00:08:47,240 --> 00:08:49,560 Speaker 3: rey payments sort of before the house is built. What's 171 00:08:49,559 --> 00:08:51,360 Speaker 3: happening at the moment is that that's happened on such 172 00:08:51,400 --> 00:08:53,880 Speaker 3: a grand scale. It seems like the banks and the 173 00:08:53,920 --> 00:08:57,760 Speaker 3: developers have kind of over promised, overdeveloped, and so you've 174 00:08:57,800 --> 00:08:59,320 Speaker 3: got this issue where a whole bunch of people in 175 00:08:59,360 --> 00:09:02,080 Speaker 3: China who are being asked to start paying back mortgages 176 00:09:02,120 --> 00:09:04,960 Speaker 3: for houses that don't even exist yet. And it's just 177 00:09:05,040 --> 00:09:08,640 Speaker 3: kind of a sign I guess that the property boom 178 00:09:08,720 --> 00:09:10,760 Speaker 3: maybe went a little bit too far and that the 179 00:09:10,800 --> 00:09:13,320 Speaker 3: banks have kind of overreached a little bit, similar to 180 00:09:13,320 --> 00:09:15,240 Speaker 3: stories in a way that we've heard of, you know, 181 00:09:15,280 --> 00:09:17,120 Speaker 3: coming out of America a decade ago, there was a 182 00:09:17,120 --> 00:09:19,720 Speaker 3: big problem with kind of too much housing, what we 183 00:09:19,760 --> 00:09:22,440 Speaker 3: call a housing bubble. There's a similar fear in China, 184 00:09:22,880 --> 00:09:26,000 Speaker 3: and at the moment we're starting to see people are protesting, 185 00:09:26,080 --> 00:09:28,800 Speaker 3: refusing to pay back these mortgages, and there's generally a 186 00:09:28,800 --> 00:09:31,520 Speaker 3: bit of nervousness in China's housing market, that it might 187 00:09:31,679 --> 00:09:35,360 Speaker 3: come to a shuddering halt, and that that might jeopardize 188 00:09:35,520 --> 00:09:38,920 Speaker 3: real estate businesses, but it might jeopardize China's broader banking 189 00:09:38,960 --> 00:09:41,200 Speaker 3: system and have some kind of ripple effects that are 190 00:09:41,200 --> 00:09:43,960 Speaker 3: really concerning for China. So that housing boom, which was 191 00:09:44,000 --> 00:09:48,520 Speaker 3: such a symbol of China's impressive growth, looks now like 192 00:09:48,559 --> 00:09:49,559 Speaker 3: it's in a fair bit of trouble. 193 00:09:49,720 --> 00:09:52,680 Speaker 2: And Tom, I guess it's important to note that the 194 00:09:52,720 --> 00:09:55,920 Speaker 2: whole world is a little bit shaky from an economic 195 00:09:56,000 --> 00:09:59,560 Speaker 2: point of view, and you know, we're talking about signs 196 00:09:59,559 --> 00:10:02,760 Speaker 2: of a session in plenty of countries around the world. 197 00:10:02,920 --> 00:10:05,880 Speaker 2: Is it particularly worse in China? Not so much worse, 198 00:10:05,920 --> 00:10:09,640 Speaker 2: I think, just different. I think that's probably what I'd emphasize. So, 199 00:10:09,840 --> 00:10:11,120 Speaker 2: you know, the rest of the world at the moment, 200 00:10:11,160 --> 00:10:14,840 Speaker 2: we're really worried about rising prices and rising interest rates, 201 00:10:15,280 --> 00:10:17,120 Speaker 2: and there's a bit of a concern that that could 202 00:10:17,120 --> 00:10:21,080 Speaker 2: tip countries like America or maybe even Australia into an 203 00:10:21,120 --> 00:10:25,160 Speaker 2: economic downturn. China's problems are very different to that. You know, 204 00:10:25,240 --> 00:10:27,600 Speaker 2: China's the housing bubble I've mentioned, there are a number 205 00:10:27,640 --> 00:10:31,400 Speaker 2: of other problems that China faces that are really China specific. 206 00:10:31,800 --> 00:10:32,800 Speaker 2: So another one is tech. 207 00:10:33,280 --> 00:10:35,440 Speaker 3: Tech's being the kind of great white hope for the 208 00:10:35,520 --> 00:10:38,480 Speaker 3: Chinese government to be the thing that replaces you know, 209 00:10:38,760 --> 00:10:42,240 Speaker 3: factories and the thing that replaces this housing boom, to 210 00:10:42,280 --> 00:10:44,960 Speaker 3: be kind of China leading the world in renewable tech, 211 00:10:45,120 --> 00:10:48,520 Speaker 3: in artificial intelligence. But the progress on that front's been 212 00:10:48,679 --> 00:10:50,599 Speaker 3: I think a little bit disappointing compared to what the 213 00:10:50,679 --> 00:10:54,120 Speaker 3: Chinese government expected. So that's one problem. China's got to 214 00:10:54,120 --> 00:10:56,679 Speaker 3: be COVID problem. That's really you know, China's kind of 215 00:10:56,720 --> 00:10:58,040 Speaker 3: the only country left in the world. 216 00:10:58,120 --> 00:11:00,000 Speaker 2: They're still going for COVID zero, aren't they. 217 00:11:00,080 --> 00:11:04,040 Speaker 3: The phrase they use is dynamic COVID zero, which basically 218 00:11:04,120 --> 00:11:06,600 Speaker 3: means they've given up on actual zero because they can't 219 00:11:06,600 --> 00:11:09,240 Speaker 3: get there anymore. But they're still doing lockdowns and they're 220 00:11:09,240 --> 00:11:10,839 Speaker 3: still trying to suppress it as much as they can. 221 00:11:10,880 --> 00:11:12,200 Speaker 3: So I think in the last few weeks there have 222 00:11:12,240 --> 00:11:16,040 Speaker 3: been sixty different lockdowns across China, and so that obviously 223 00:11:16,080 --> 00:11:19,679 Speaker 3: has economic effects. We all remember what lockdowns were like 224 00:11:19,720 --> 00:11:21,880 Speaker 3: here in Australia. But there's a bit of a double 225 00:11:21,960 --> 00:11:25,600 Speaker 3: edged sword too, because China's vaccination rates among its elderly 226 00:11:25,600 --> 00:11:28,160 Speaker 3: population are really low, so they kind of trapped a 227 00:11:28,200 --> 00:11:29,960 Speaker 3: little bit because if they take the foot off the 228 00:11:29,960 --> 00:11:32,400 Speaker 3: pedal with COVID, then you've got, you know, the risk 229 00:11:32,440 --> 00:11:34,559 Speaker 3: of the health system getting overwhelmed. There's all the stuff 230 00:11:34,559 --> 00:11:36,080 Speaker 3: that we were talking about, you know, a year or 231 00:11:36,080 --> 00:11:38,560 Speaker 3: two ago. The China still faces that problem on a 232 00:11:38,600 --> 00:11:42,360 Speaker 3: much bigger scale. So that's not helping the economy. And 233 00:11:42,400 --> 00:11:44,920 Speaker 3: then you get this population problem. So you might be 234 00:11:44,920 --> 00:11:48,160 Speaker 3: familiar with the one child policy that China had for 235 00:11:48,640 --> 00:11:51,080 Speaker 3: thirty years or so, and that was all about, you know, 236 00:11:51,160 --> 00:11:54,120 Speaker 3: China was concerned about its population going too fast. There's 237 00:11:54,160 --> 00:11:56,679 Speaker 3: one point five billion people in China and they were 238 00:11:56,679 --> 00:11:59,480 Speaker 3: worried about not having enough infrastructure to accommodate all these people. 239 00:11:59,520 --> 00:12:02,319 Speaker 3: So that had one child policy. But it's kind of backfired, 240 00:12:02,520 --> 00:12:05,960 Speaker 3: and now they've got this problem where there are just 241 00:12:06,000 --> 00:12:08,480 Speaker 3: not enough young people, too many old people, not enough 242 00:12:08,520 --> 00:12:10,400 Speaker 3: young people. As a result of this one child policy, 243 00:12:10,400 --> 00:12:13,520 Speaker 3: there's also an imbalance between men and women, which is 244 00:12:13,600 --> 00:12:16,120 Speaker 3: kind of I guess it's kind of uncomfortable to think 245 00:12:16,160 --> 00:12:18,520 Speaker 3: about the reasons that sit behind that. But essentially, with 246 00:12:18,559 --> 00:12:20,920 Speaker 3: the one child policy, there were families who would prefer 247 00:12:20,960 --> 00:12:22,640 Speaker 3: to have a son rather than a daughter, and so 248 00:12:22,679 --> 00:12:26,240 Speaker 3: there's that imbalance as well. And that means, according to 249 00:12:26,760 --> 00:12:30,600 Speaker 3: kind of predictions from the UN, China's population might already 250 00:12:30,640 --> 00:12:33,960 Speaker 3: be starting to decline and might decline pretty rapidly. And 251 00:12:34,000 --> 00:12:36,920 Speaker 3: so I guess there are lots of reasons why declining 252 00:12:36,960 --> 00:12:41,160 Speaker 3: population is a concerning thing for any country. But in 253 00:12:41,200 --> 00:12:44,599 Speaker 3: an economic sense, it also obviously places a limit on 254 00:12:44,640 --> 00:12:47,000 Speaker 3: how much economic activity you can have. So all of 255 00:12:47,040 --> 00:12:49,120 Speaker 3: these things, they're not the kind of problems we're talking 256 00:12:49,160 --> 00:12:51,680 Speaker 3: about anywhere else. We're talking everywhere else. We're talking about 257 00:12:51,679 --> 00:12:55,200 Speaker 3: inflation in China. It's a very different story. But yeah, 258 00:12:55,240 --> 00:12:57,520 Speaker 3: coming at the same time as we're worried about inflation 259 00:12:57,600 --> 00:13:01,320 Speaker 3: in other countries, Sami, it is contributing to the concern 260 00:13:01,400 --> 00:13:03,400 Speaker 3: about a global recession. 261 00:13:03,600 --> 00:13:06,000 Speaker 2: And time, we've only got a minute left this morning. 262 00:13:06,120 --> 00:13:08,480 Speaker 2: I just wanted to quickly ask you what it means 263 00:13:08,480 --> 00:13:11,480 Speaker 2: for you and I here in Australia, and also kind 264 00:13:11,520 --> 00:13:14,480 Speaker 2: of staring into your crystal ball a little bit about 265 00:13:14,480 --> 00:13:15,520 Speaker 2: what happens next. 266 00:13:15,720 --> 00:13:18,559 Speaker 3: Yeah, well, it's pretty concerning for us in Australia. Of course, 267 00:13:18,559 --> 00:13:21,800 Speaker 3: we're already experiencing the rising prices problem here and the 268 00:13:21,960 --> 00:13:25,640 Speaker 3: rising interest rates. We're looking at America with a lot 269 00:13:25,679 --> 00:13:29,280 Speaker 3: of concern because I guess the global economy is all connected. 270 00:13:29,320 --> 00:13:32,320 Speaker 3: If America goes down, if China goes down, there's ripple 271 00:13:32,320 --> 00:13:35,439 Speaker 3: effects to Australia. We rely on these countries for trade 272 00:13:35,920 --> 00:13:37,840 Speaker 3: and for a whole number of other reasons, and so 273 00:13:38,440 --> 00:13:40,760 Speaker 3: if they go down, they shatter confidence in the global 274 00:13:40,800 --> 00:13:45,280 Speaker 3: system and they have really significant consequences for US. Australia's mining, 275 00:13:45,280 --> 00:13:47,360 Speaker 3: but so much of our prosperity really over the last 276 00:13:47,440 --> 00:13:50,000 Speaker 3: couple of decades has been because of China has bought 277 00:13:50,040 --> 00:13:53,600 Speaker 3: so much. One in every three dollars we sell overseas 278 00:13:54,920 --> 00:13:57,600 Speaker 3: is with China. So that's a really really significant thing. 279 00:13:58,040 --> 00:14:00,680 Speaker 3: So you're starting to hear treasure of Jim Chalmers talk 280 00:14:00,720 --> 00:14:04,360 Speaker 3: about these global storm clouds on the horizon. Yeah, we 281 00:14:04,400 --> 00:14:06,240 Speaker 3: spend a lot of time talking about inflation, but China 282 00:14:06,280 --> 00:14:08,680 Speaker 3: is definitely one of those storm clouds, and if something 283 00:14:08,720 --> 00:14:11,040 Speaker 3: really bad happens in China, it will definitely have some 284 00:14:11,120 --> 00:14:12,560 Speaker 3: significant consequences here. 285 00:14:12,960 --> 00:14:14,880 Speaker 2: That is all we've got time for today on the 286 00:14:14,960 --> 00:14:17,120 Speaker 2: Daily Ods. Thank you so much, Tom, that hasn't left 287 00:14:17,120 --> 00:14:20,240 Speaker 2: me feeling too great about our global economy, but we'll 288 00:14:20,280 --> 00:14:23,160 Speaker 2: power on for the time being. If you enjoyed this 289 00:14:23,320 --> 00:14:25,080 Speaker 2: episode of The Daily OS and you think you learned 290 00:14:25,080 --> 00:14:28,240 Speaker 2: something new about China and its economy, why don't you 291 00:14:28,360 --> 00:14:30,240 Speaker 2: send it to a friend. It will really help us 292 00:14:30,240 --> 00:14:33,240 Speaker 2: grow and spread the Daily ODS word to as many 293 00:14:33,280 --> 00:14:36,920 Speaker 2: people as possible. Have a fantastic hump Day and we 294 00:14:36,960 --> 00:14:37,960 Speaker 2: will speak to you tomorrow.