PING PONG PANG #3

Actually, this one is Pang. It is not often that I agree with Professor Ross Garnaut after his foray into climate change (Australian Financial Review 2^nd October 2012), but this article on China is spot on. His prognosis is that Australia will be hit by “three mutually reinforcing negatives underway in China”. These are shifts away from heavy industrial investment, a move to lower emissions, and a cyclical downturn. He compares the challenges faced by Australia today to those of the Great Depression and the 1970-1983 period. He talks a lot about “hardship” and “sacrifice”.

This is a long way from the “miracle economy” speak we get from the Australian government. I was in Sydney this week where even CBD drycleaners are reporting revenue drops of 30% or more. This may be anecdotal, but the For Lease and For Sale signs aren’t.

I became Foundation Chief Executive of UniQuest Limited in 1983 and we were able to build a great business, although the 1987-1993 period was tough. But volatile times do create opportunities. That’s what we have now, but perhaps not in iron and coal.