Bullish Australian businesses have China's west in sight(2)

They believe further economic reform will create avenues for expansion, and expect greater economic and political stability following China's recent leadership transition.

Eslake agrees that the economic stability stemming from 18th National Congress of the Communist Party of China late last year has bolstered confidence in Australian business sectors.

"While Australia has benefited significantly from rapid increases in China's demand for iron ore, coal, natural gas and other commodities, Australia's interests are not well served by a volatile or unsustainable growth rate in China, or by 'stop go' economic policies prompted by periodic outbreaks of inflation."

Bank of America Merrill Lynch regards China's medium term growth outlook is more favorable than that of nearly all other ' emerging' economies. To say nothing of the world's 'developed' economies.

Eslake noted, "Australia would be very vulnerable to any abrupt slowdown in China's economy caused by the build-up of unsustainable financial or other imbalances in the Chinese economy similar to those which developed in the United States and Europe leading up to the onset of the global financial crisis."

While China's Guangdong, Shanghai and Jiangsu remain the favored destinations for Australian investment, Australian businesses are also searching further afield and importantly into China's west - including Chengdu of Sichuan and Chongqing.

Australian firms have invested well over 350 million Australian dollars in Sichuan - mainly in Chengdu's building materials, clean technologies, food and beverage industry, and financial services.