China’s reopening will put a floor under the global economic outcomes and has some positives for the Australian economy but will carry with it some negatives for the rest of the world.
It will increase demand for commodities like iron ore, coal, LNG and oil. That’s good for resource-heavy economies, like Australia’s, but not so positive for other developed economies and particularly threatening for Europe.
The war in Ukraine remains a wildcard for the global economy. Credit:AP
China’s weakness last year helped Europe deal with an energy crisis sparked by its response to Russia’s invasion of Ukraine.
While the very rapid switch from dependence on Russian gas to alternate sources came at a very heavy cost – it paid stratospheric prices for LNG and an increased reliance on coal also meant increased costs – the prices at which Europe secured its energy supplies (at least for this year) would have been even higher if China’s…