Bullish On Australia As China's Resource Provider

A good piece up on the Sydney Morning Herald about Australia's position in the world as China's resource supplier. Makes sense, really. You've got 1.3 billion citizens that want to play catch up with the Western World with regards to our standards of living. And, with Australia being situated where it is, they are very likely to profit from this. The commodity country will be able to supply all the necessary base materials for China's growth.

This means two things, really. (Well, maybe three.) First, the commodity bull market may not be over. We may see some short-term moderation. But, long-term, those 1.3 billion citizens are in a big hurry to attain the same standards as just about every other country in the world, and are going to need base commodities to build this infrastructure. This is a structural change in the commodities world, and the ramifications are huge and permanent.

Second, with that much growth potential, the world has a new "engine of growth" that will fuel the world's economies. China's GDP per capita is $7,600.00. With 1.3 billion citizens, if they were to move just 20% in their per capita PPP, that would represent a huge move in the world's economic growth.

... and third... if China were to increase its per capita PPP by a mere $1,538 per person, then they would be the world's largest economy. Gulp!