A Study On The Asymmetry Of The Economic Interdependence Of Sino-Australian Commodity Trade

In the economic interdependence theory, sensitivity and vulnerability can be analyzed to probe into the interdependence relationship of trade between two countries. Sensitivity refers to the changes of one country's cost due to the changes of another country. In the aspect of trade volume, three indicators (proportion of corresponding country's export to home country's total export, the proportion of bilateral trade volume to the home country's total trade volume or to GDP) can be indicated; in the aspect of trade structure, the proportion of strategic commodities to bilateral trade volume can be adopted. Vulnerability refers to the country's ability to seek alternative raw materials and markets when the external supply of raw materials and export markets are hampered. The index of market alternativity of trading commodities of a country to another can be adopted as an indicator. Imbalance on the sensitivity and vulnerability of bilateral trade accounts for the asymmetry of the two countries' interdependence. Asymmetric interdependence will lead to the asymmetric dominance in bilateral trade cooperation. Usually, vulnerability is more effective to reveal the decision-makers of trade rules in the international relationship, compared to sensitivity.To examine Sino-Australian commodity trade in virtue of economic interdependence theory, we find out in sense of three related indicators that Australia's trade dependence on Chinese commodities has a high sensitivity, and that the dependence of China on Australia is far less than that of Australia on China. However, in aspect of trade structure, Chinese import of strategic commodities (Iron ore as the representative) has a high dependence on Australia, showing a very strong sensitivity, while Australia has no sensitivity on that of China. For vulnerability of the mutual trade, Australia's dependence on the Chinese is replaceable, showing no vulnerability, regardless of import or export markets; While China does not have vulnerability in exports to Australia, but has strong vulnerability in imports from Australia due to the lacking of alternativity of import markets represented by resource products of iron ore. The asymmetry in trade interdependence between two countries puts China in a passive position in the Sino-Australian economic and trade relationship. There is not only high sensitivity, but also a strong vulnerability on China's strategic commodity imports from Australia, which is not an exception in China's foreign trade pattern. In fact, China shows a high dependency and poor market alternativity in imports of strategic resources, such as oil, copper, aluminum, zinc, and etc. It is universal in China's foreign trade that external dependence of strategic resources is characterized with sensitivity and vulnerability, which obviates our right to have a say in the pricing right contention in international market. Thus, our country is facing enormous resource cost during the economic development, with enormous threat underlying economic security. It is an urgent task to address and solve this problem during our country's economic development.First of all, to address the sensitivity and vulnerability in external dependence of strategic resources, we believe that the experience of developed countries such as the United States and Japan is worthy of our reference, including promoting diplomat of strategic resources, the establishment of resource reserve system, the development of offshore resource base, the formation of transnational groups and so on. Secondly, moderate regulation of domestic supply and demand of resources shall be taken. In the aspect of resource supply, technology advancement shall be relied on to upgrade exploring level and increase production; domestic supply rate shall be gradually boosted; and resource recycling shall be intensified. In the aspect of resource demand, lower concentration, separate foreign purchase and price bidding-up of downstream enterprises shall be tackled with; merge and acquisition of downstream enterprises shall be accelerated to increase industry concentration rate; geological layout of downstream enterprises shall be optimized to lower transportation cost, increase energy utilizing efficiency and to economize energy use. In the Market system construction and the trade mode improvement, domestic spot and forward exchange market shall be consummated; combined purchase and long-term contract shall be adopted in foreign purchase; and multiple import markets shall be explored.