Question

You are tasked with producing an Economic Impact Assessment of Australia’s Agriculture, Forestry and Fishing Support Services industry. In addition, you need to assess in general terms how climate change impacts in developing countries, e.g. China can impact Australia’s Agriculture, Forestry and Fishing Support Services industry in the long run.

Question:

Climate scientists say there will be winners and losers from climate change. Take China as an example and discuss in detail whether China will be a winner or loser and how this in turn will impact (positively or negatively) Australian agribusiness sector in the long run.  

Answer 1

China potentially stands winner as it devalues its currency and makes exports competitive and thus agricultural and forestry production is higher in China amplifies extensively. Moreover with cheap labour cost of export is lowers and thus exports rise significantly and trade surplus rises for China.

Australia thus doesn't benefits as itcimports low cost produce from China which leads to higher trade deficit and worsens their exchanges rate simultaneously. Also due to lack of comparative advantage, Australia lacks competitiveness in global markets and thus stands to be loser.

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