China's economic transition is in sync with Australia's as both nations undertake comparable structural reforms to service the rising Asian middle class's consumer needs, Australian Treasurer Scott Morrison said.
The Asia region is undergoing significant social change as the regional middle class grows from 600 million to over 3 billion within the next 35 years, according to the Organization for Economic Cooperation and Development (OECD). China's middle class alone is expected to near 1 billion members.
Meanwhile, Australia is attempting one of its most significant economic transitions as the commodities boom comes to a halt, helped by a low Australian dollar and the tailoring exports to capitalize on the demographic change.
"We are seeing very strong growth in our services sector not unlike what they're seeing in China," Morrison told Bloomberg TV on Thursday.
"So there is somewhat of a synchronization taking place between the Australian economy and the Chinese economy. New parts of our economy are participating in the growth of new areas of growth in the Chinese economy.
Chinas services sector -- which now accounts for 50.5 percent of GDP, 10 percent more than manufacturing and construction -- grew at 8.3 percent in 2015, up from 7.9 percent in 2014, despite the overall economy slowing to 6.9 percent. Consumption itself accounted for 66.4 percent of China's GDP growth.
Morrison said the low Australian dollar -- 68.99 U.S. cents at 1755 local time -- is supporting the export of Australia's service industries, such as tourism, while free trade agreements (FTAs) with China, Japan and South Korea are also aiding transition.
"With our export industries feeding into these new trade agreements that we have, it also makes us far more competitive," Morrison said.
Australia has been granted preferential access under the regional FTAs for its high valued agriculture and services exports which have seen unprecedented growth levels in Asian exposed companies over the past year, such as health and vitamin supplements manufacturer Blackmores.
Morrison said Australia will be able to ride out China's transitional pains that are fuelling financial market fears, capital outflows and a slump in commodities -- particularly iron ore, Australia's largest export by volume -- from reduced demand while supply increases.
"The Australian economy is not one-dimensional," Morrison said.
"Our economy in the future and even now will be less dependent on one market, one commodity, one part of what we do. It is a much more diversified economy."
