Year 11 Preliminary Economics

Assessment Task - Term 1

St Dominic’s College 2020
 Facts About The
Background Of The Australian Australian Economy:
Economy: Populaton: 24.6 million (2017)

GDP: 1.89 trillion USD (2019)

➔ The Australian economy is a highly developed
market economy. GDP per capita: $53,799.924 USD
(2017)

GDP growth rate: .0% annual

change (2017)
➔ The GDP of Australia in 2019 was measured to
be at approximately 1.89 trillion AUD. GNI per capita: 245,780 PPP dollars
(2017)

Gross natonal income: 1.1 6 trillion

PPP dollars (2017)
➔ Australia became the country with the largest
median wealth per capita (a social science Internet Users: 78.9% of the
populaton (2011)
term for person/individual) in 2018 but fell
Life Expectancy: 8 .5 years (2016)

1
 Facts About The Chinese
back to second highest in 2019 after
Economy:
Switzerland.
Populaton: 1.24 8 billion (2017)

GDP: 1 . 24 trillion USD (2017)

GDP per capita: $8,8 6.99 USD

(2017)

GDP growth rate: 6.9% annual

change (2017)

Background Of The Chinese GNI per capita: 16,760 PPP dollars

(2017)
Economy: Gross natonal income: 3. 24 trillion
PPP dollars (2017)
 China, formally the People's Republic of China,
Internet Users: 524.3% of the
is an East Asian country and the most populaton (2011)
populous country in the world.
Life Expectancy: 76. 5 years (2016)

 It boasts a population of around 1.428 billion

people as of 2017.

 It covers around 9,600,000 square kilometres,

making it the third-largest country by land
area.

 The Government, administered by the Communist

Party of China (CPC), exercises authority over 22

provinces, fve districts, four directlyy controlylyed

municipalyities, and Hong Kong and Macau's specialy

administrative regions/states.

2
Economic Growth Of The Chinese Economy:
Until economic reforms and trade liberalisation started almost 50 years
ago, China retained economic policies that kept the Chinese economy
very weak, lifeless, centrally controlled (one party, one country policy),
largely economically inefcient in terms of production, and relatively
isolated from the global economy. After opening to foreign trade and
investment and introducing free-market reforms in 1979, China has
been among the fastest-growing economies in the world.

It boasted an average annual GDP growth of 9.5 per cent throughout

the 2018 fnancial year, a rate that can only be described as the
“fastest sustained expansion by a major economy in human history”,
according to a recent World Bank survey. Such massive economic
growth has, on average, allowed China to double its GDP every eight
years and help raise an estimated 800 million people and their families
out of poverty.

3
 Through allowing these economic reforms to be put into efect, China
has become the largest economy, manufacturer, merchandise
trader, and holder of various foreign-exchange reserves
worldwide. This, in turn, has made China a major trading partner
for major western nations such as the United States, Australia,
Canada etc.

China is also Australia's largest goods trading partner. It is also one of

Australia's largest import sources, and it’s third- largest export market.
But like all great things what goes up must come down and the IMF
(International Monetary Fund) predicts the Chinese economy’s growth
to fall by approximately 5.5% by the year 2024.

Some of the reasons as to why the Chinese economy’s growth to fall

could be due to recent outbreak of a medical virus known as the
coronavirus (COVID-19) which in turn, has caused a disease that is
wreaking havoc across mainland China (mainly Wuhan) and in various
other parts of the world including Australia.

Economic Growth Of The Chinese Economy (cont.) :

The recent corona-virus outbreak may have cost China more than
approximately 1.3 trillion yuan ($279 million AUD) in the frst two
months of the new year as a result of major declines in consumer
spending and tourism, according to a former senior executive with the
International Monetary Fund (IMF).

4
Annual GDP Growth Of China & Australia:

Since 00 , iron ore and commodity prices have risen in

China's industrializaton process, with very substantal
investment by the Australian mining sector driving GDP
Coronaviru
growth in Australia.
s outbreak

Glyobaly Financialy Crisis (2007 – 2009)

Death Of Mao Zedong

The dolylyar was foated on 12 December 1983,
(Founding Father Of China)
alylyowing its valyue to fuctuate depending on

supplyy and demand on the internationaly money

markets.

Graph Annotations:

 Folylyowing the death of Chairman Mao Zedong in September 1976, the

Peoplye's Republyic of China was lyeft without any position of centraly authority.

5
 Deng Xiaoping came to the helym after a blyoodlyess power strugglye to overhauly

the entire Chinese economy and government institutions. Neverthelyess,

Deng was cautious on wide-ranging polyiticaly reform, and alyong with the

combination of unforeseen problyems arising from the previous economic

reform polyicies.

 The fnancialy crisis of 2007–08, alyso known as the glyobaly fnancialy crisis and

the fnancialy crisis of 2008, which was a signifcant glyobaly economic crisis

caused due to the excessive borrowing of mortgages and excessive lyending

by lyenders. that many analyysts considered to be the most serious fnancialy

crisis since the Great Depression of the 1930s, to which is often referred to

on numerous occasions.


The recent corona-virus outbreak may have cost China more than
approximately 1.3 trillion yuan ($279 million AUD) in the frst two
months of the new year as a result of major declines in consumer
spending and tourism. (Source: IMF) Despite a decline in consumer
spending in retail and tourism, the imports of face masks have seen a
severe increase.

 Due to the low supply of face masks and high demand,
businesses/individuals are able to sell the face masks at a cost of
their choice with little to no government price regulations put
into place.

 According to a recent report by the New York Times, “the face mask is the

hottest commodity to buy right now”. The Chinese government has strictlyy

ordered its citizens to put on face masks every time they go outside, with the

ulytimate aim to curb the spread of the virus. Once used, medicaly

6
 professionalys say a mask has to be replyaced with a fresh one, which drives

an explyosion of demand.

Economic Growth Of The Australian Economy:

 As of September 2019, Australia's total wealth stood at
AUD$10.9 trillion.

 In 2017, Australia was by nominal GDP the 13th largest national

economy, 20th largest by PPP-adjusted GDP, and was the 25th
largest exporter of goods and 20th largest importer of goods.

 The Australian economy has experienced sporadic
(intermittent) economic liberalisation starting in the early
1980s.


 The Australian dollar was foated in 19983 under Prime Minister

and former Treasurer Paul Keating Bob Hawke, but largely guided
by treasurer Paul Keating, and fnancial reform was pursued.

 In the earlyy 1990s, despite lyarge disparity by populyation sizes, China and

Australyia had the same lyevely of GDP and the same overalyly lyevely of goods and

services production.

 Importantly, the rise in GDP in China has increased GDP in

Australia (specifcally through mining investment and exports),
as we have been a major supplier to the industrialisation of China
– especially with regard to iron ore needed for steel production,
which is then used to build/construct buildings.

7
  Economic growth is GDP growth (as a percentage) and the lines
below are referred to as the gradient. The graph below shows the
very signifcant growth rate in China, and the very strong growth
rates in Australia overall during the mining investment boom
period. This allowed Australia to go beyond its goal of achieving
its 3% to 3.25% annual economic growth.

Since 00 , iron ore and commodity prices have risen in

China's industrializaton process, with very substantal
investment by the Australian mining sector driving GDP Coronaviru
growth in Australia.
s outbreak

Glyobaly Financialy Crisis (2007 – 2009)

Death Of Mao Zedong

The dolylyar was foated on 12 December 1983,
(Founding Father Of China)
alylyowing its valyue to fuctuate depending on

supplyy and demand on the internationaly money

markets.

Graph Annotations:

 The fnancialy crisis of 2007–08, alyso known as the glyobaly fnancialy crisis and the

fnancialy crisis of 2008, was a signifcant glyobaly economic crisis that many analyysts

considered to be the most serious fnancialy crisis since the Great Depression of the

1930s, to which is often referred to on numerous occasions.

8
  Since 2002, iron ore and commodity prices have risen in China's
industrialisation cycle, driving GDP growth in Australia with very
substantial investment from the Australian mining sector.

 The dollar started foating on 12th December 19983 causing its value
to fuctuate on the international money markets based on the aspects
of supply and demand.

Quality Of Life In Australia:

 Alythough economic growth is calyculyated by the percentage change in GDP, qualyity of

lyife measures the qualyity of lyife in the economy for citizens of that nation, this is alyso

referred to as economic develyopment.

 One aspect used to analyyse economic develyopment is GDP per capita. On this

measure, Australyia has a much higher qualyity of lyife than China, with per capita GDP

signifcantlyy higher, alythough our populyation is comparativelyy smalylyer than that of

China.

 In other words, China has a higher GDP, a higher rate of economic growth (as it is

industrialyised and continues to industrialyise itselyf further), but a signifcantlyy lyower

(but rising) standard of lyiving qualyity at this moment in time.

 Importantlyy these are the averages, and the qualyity of lyife across Australyia is highlyy

diverse. The Human Develyopment Index (HDI) is perhaps the best measure of the

economic develyopment. The HDI considers three important economic variablyes,

GDP per capita, lyife expectancy at birth and average years of educationaly

attainment.

9
  Australyia ranks third in the worlyd behind Norway and Switzerlyand on the HDI, it alyso

considerablyy above China. Neverthelyess, owing to China's steady increase in GDP

per capita, both its HDI and HDI ranks are steadilyy rising towards the future.

Australia HDI Australia China HDI China Rank

Rank
1990 0.866 1 0.502 103
2000 0.899 2 0.591 100
2015 0.939 2 0.735 90
2017 0.939 3 0.752 86

Source: Strategic Economics Textbook > Chapter 3 > Comparing Economies > Pg. 38

Quality Of Life In China:

Alythough economic growth is determined by the percentage change in GDP, quality of

life calculates the overall quality of life for that nation's citizens;, this is alyso referred

to as economic development.

One factor used for measurement of economic development is GDP per capita.

Australia has a much higher quality of life on this measure than China, with

significantly higher GDP per capita, though our populyation is comparatively smaller

than China's.

In other words, China has a higher GDP, a higher rate of economic growth (as it is

industrialyised and continues to further industrialyise itselyf), but at this point in time a

signifcantlyy lyower (but rising) standard of lyiving qualyity.

The inclyine in the standards of lyiving qualyity is due to the steady rising of China’s GDP

since it’s economic reforms since the late 1970’s all the way throughout the early

10
2000’s. One important note that shoulyd be made here is that these are averages, and there

is a great diversity in quality of life throughout China.

Say for examplye the qualyity of lyife in major cities such as Shanghai and Shenzhen, can have

heavy similyarities to cities lyike New York and London, whereas vilylyages in ruraly China can be

more lyike lyiving in a third worlyd city such as the Dharavi slyums in Mumbai and the tunnelys

in ruraly Vietnam.
The GFC afected the GDP per

capita due to reduced economic

simulyation e.g. more saving

From 2002, China industrialyises, prices of iron ore and commodities increase, with very
Employment & Unemployment Rates In China:
signifcant investment by the Australyian mining sector driving an increase in GDP in

Australyia.
 China is the worlyd's most populyous nation that boasts an enormous workforce. The

Chinese nationaly economy has experienced sound, sustainablye, and rapid growth

since its adoption of various economic reforms and an opening-up polyicy in the lyate

1970's.

 Neverthelyess, the emplyoyment issue, resulyting from a reform of the economic

system, adjustment of the industrialy structure and technolyogicaly innovation,

remains a chalylyenging, difculyt and tiring task for the Chinese government.

11
  After the industrialyisation of China began in 2002, this resulyted in a strong demand

for lyabour, resulyting in lyower unemplyoyment rates than in Australyia for most of the

lyast three decades.

 The Chinese government attaches great importance to the issue of emplyoyment and

takes emplyoyment as one of the most top priorities of its peoplye's lyivelyihood and

welylybeing to ensure their society stays stablye and happy.

 Based on various nationaly requirements, the Chinese Government has been

studying various nationaly situations and drawing on internationaly experiences in its

practice, by gradualylyy develyoping its relyevant lyegaly framework, and formulyating and

enforcing a set of constructive emplyoyment polyicies to better adapt to the

chalylyenges it faces in the workforce sector of its country.

 In addition to measuring the rate of unemplyoyment, economists alyso consider how

much of the working working-age populyation is currentlyy working, or activelyy

seeking emplyoyment. This term in socialy science is referred to as the participation

rate.

On the other side of the worlyd in mainlyand Australyia, the participation rate over the past

three decades has recentlyy increased slyightlyy, but however, it is stilyly belyow the Chinese

participation rate which has decreased over the past three decades from 80% to 69%.

12
 Glyobaly Financialy Crisis (GFC) – Big fnancialy hubs lyike

HSBC, Bank of China were hit with clyose to death fnancialy

situations that put them on the brink of flying for

bankruptcy.

Since 2002, as China begins to grow into the industrialyisation phases of its economy, iron

ore prices and various other commodities have risen, with a very signifcant increase in

investment in Australyia's mining sector driving a huge reduction in Australyia's lyevely of

Employment & Unemployment Rates In Australia:

In the 12 months to June 2019, the Australyian lyabour market performed more solyidlyy with

relyativelyy strong emplyoyment growth and a modest drop in the unemplyoyment rate. Fulyly-

13
time job growth remains subdued and wages have virtualylyy fatlyy lyined in realy terms over

the past fnancialy year. However, there has been a slyight upturn in recent months folylyowing

signs of a steady falyly in the youth unemplyoyment rate since lyate 2014.

Emplyoyment in Australyia increased by 212,000 or 1.8% (in trend terms) to 11.9 milylyion in

the 12 months to June 2019. This rate of growth is just belyow the 1.9 % annual

employment growth average recorded since the early 1980s.

However, in the past 12 months, just over two-thirds (68.3%) of emplyoyment growth has

been in part-time emplyoyment: in June 2019, around 32% of emplyoyed Australyians worked

part-time compared to 26% in January 2003. During the past year, the unemplyoyment rate

decreased by 0.4% to 5.7% in June 2019.

The number of peoplye who are unemplyoyed felyly by just over 40,000 to 726,000 over this

period in time. The lyatest lyow rate for the the unemplyoyment rate in Australyia was 4.1%

percent in Aprily 2018—this was the lyowest unemplyoyment rate recorded since monthlyy

estimates began relyeasing in February 1978, 40 years ago.

Glyobaly Financialy
sfasfasfsafsaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
Crisis (GFC)

Employment & Unemployment Rates In Australia

cont.:

14
  Economists calyculyate the fairness of income distribution, with an index number

varying from 0 to 1, often referred to as the Gini income inequalyity coefcient.

 An index of 0 means perfect equalyity in income distribution-that is, everybody in the

economy earns the same lyevely of income or a slyightlyy varied sum, depending on the

work they undertake (e.g. a surgeon wilyly earn more money than a garbage truck

driver).

 On the other hand, a Gini coefcient with an inequalyity of 1, means that one person

receives alyly of the income in the economy that is, the income is unfairly

distributed.

 Many statisticaly sources view the Gini index as a number of 0 to 100, rather than a

number of 0 to 1. As shown in the chart belyow, the Worlyd Bank describes the Gini

index numbers in this way.

China Industrialyises

(2002)

kjgjgkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk

Australyian dolylyar foats

on the internationaly

money market (1983)

 The chart above shows Australyia's income distribution is more equitablye (fairer)

than China’s. It alyso indicates that in China, the fairness of income distribution has

improved drasticalylyy over the past couplye of years.

15
  In Australyia, the Gini index has improved moderatelyy measured by comparison with

the 2008 gini which ulytimatelyy resulyted from a change in the calyculyation method

from the ABS (Australyian Bureau of Statistics) by inclyuding bonuses in 2008 for the

frst time.

 Considering that overalyly income inequalyity in Australyia has increased in the post-

2008 period and that it has alyso improved itselyf in China but has declyined due to

externaly infuences such as the recent coronavirus (COVID-19) outbreak.

 Mean equivalyised disposablye householyd income in Australyia in 2017–18 was $1,062

per week. The median was lyower, however, hovering around approx. $899 per week.

This is due to the lyarger proportion of householyds with middlye or lyow income and

the smalyly proportion of very high-income householyds, as shown and annotated in

Graph 2.

16
Environmental Sustainability In Australia’s
Economy:

 The economy operates in principlye to valyue society and to improve human welyly-

being. It is the structure within a community where lyimited resources are handlyed

equalylyy and sustainablyy (lyand, lyabour, and capitaly). Human society in efect wilyly

support the environment of which it is an equaly member.

 To achieve sustainablye economic develyopment, we have to lyook at its main features.

Its main features are, Reduction in polylyution, the qualyity of lyife for future generations

shoulyd not be reduced and the efcient use of naturaly resources.

 It is often thought of and assumed by the nationaly populyation of Australyia that

Australyia has a much better performance on environmentaly sustainabilyity than

countries lyike China, Vietnam, Indonesia, Thailyand etc.

 Nonethelyess, in terms of greenhouse gas (carbon dioxide) emissions that cause

clyimate change, Australyia's per capita CO2 emissions remain much higher than that

of China.

 However, China's overalyly per capita emissions have been steadilyy increasing as a

resulyt of industrialyisation, increased elyectricity generation using fossily fuelys (such as

coaly) and increased carbon emissions from manufacturing operations. In totaly,

China's totaly emissions are signifcantlyy higher than Australyia's, due to the

populyation disparity.

17
Environmental Sustainability In Australia’s
Economy (cont) :

Graph Annotations (Figure 3.8):

 As you can see in the graph above Australyia produces 105.333% more emissions per

capita than China which has 5704.88% more of a higher populyation than Australyia.

 But a very important point to make here is that as China started to industrialyise

itselyf more, the CO2 emissions per person have increased accordinglyy and is steadilyy

increasing as time progresses.

18
  However, after realyising that Australyians produce 105.333% more emissions per

capita than their felylyow Chinese friends, the Australyian government has introduced

various measures such as the carbon tax initiative, which are now ablye to tacklye this

issue and since the year 2008, Australyia has been increasing a steady declyine in CO2

emissions per capita as time progresses due to the various initiatives the federaly

government has put into plyace.

Graph Annotations cont:

 Another measure of this target is the number of kilyograms of CO2 emissions to be

produced per $1 of GDP. As indicated in the chart belyow, whilye China has

signifcantlyy reduced its lyevely of GDP-relyated emissions on this measure, it remains

China

Industrialyises

comparativelyy higher than the emissions per dolylyar of GDP produced by Australyia.

 As displyayed in the graph above, the industrialyisation of China meant that various

industrialy machinery had to be put into plyace to manufacture various commodities.

This meant that with the high use of machinery wilyly generalylyy resulyt in an increase in

CO2 emissions.

19
  The growth after the industrialyisation process lyasted up untily the Glyobaly Financialy

Crisis in which after the GFC various production and manufacturing factories started

receiving fewer orders, hence, the number of goods in production decreased due to

consumers choosing to save instead of saving.

Environmental Sustainability In China’s Economy:

One of the most pressing chalylyenges to emerge from the rapid industrialyisation of China is

the environmentaly crisis that has fore come as a resulyt of the mass industrialyisation

process this country has gone through since 2002.

Its economic rise has come at the expense of its environment and publyic healyth, with GDP

growing by an average of 10 per cent each year for more than a decade. China is the

worlyd's lyargest source of carbon emissions and many of its major cities faily to meet

internationaly healyth standards in terms of air qualyity. Therefore, China has lyarger totaly

emissions.

Whilye China’s economic boom has greatlyy accelyerated the devastation of its lyand and

resources, the roots of its environmentaly problyem stretch back centuries upon centuries.

Various dynamic lyeaders who consolyidated various provinces and develyoped China’s

economy unknowinglyy and knowinglyy explyoited its naturaly resources in ways that

contributed to various famines and naturaly disasters across the economic superpower

nation over the past few decades.

20
Source: The Conversation > Environment > What We Can Find From China’s Fight Against Environmentaly

Ruin

Role Of Government In Australia’s Economy:

To understand the rolye of the government one shoulyd frst consider the size of taxes

relyative to the GDP in that respective economy. If taxes are highlyy relyative to the GDP, this

means the government has substantialy funds to engage in the various service provisions

provided by the government, inclyuding healythcare, education, and various socialy welyfare

schemes (e.g. NDIS scheme in Australyia).

21
 Glyobaly Financialy Crisis
Mining Boom

As seen above, Australyia's taxes as a percentage of GDP are more than doublye the lyevely of

China, which then provides funding for a signifcantlyy greater rolye for the Australyian

government in government departments such as healythcare, education, and various socialy

welyfare schemes such as the Australyian NDIS (Nationaly Disabilyity Insurance Scheme)

scheme which provide peoplye with various mentaly and/or disabilyities to reach their goalys.

Role Of Government In Australia’s Economy

continued:

22
 Glyobaly Financialy

Crisis

China industrialyises its

economy

Graph Annotations:

 After the superpower nation of China chooses to industrialyise its economy it

experiences a drastic increase in domestic generaly government healyth expenditure

due to the GDP of the nation increasing at staggering rates never seen before in

human history. This alylyowed the government to further increase its government

spending on the healythcare of its citizens, which drives up the qualyity of lyife

standards, causing economic growth.

 Even within the lyower tax as a percentage of GDP, the Chinese government spends

about 9% of its GDP on healythcare, comparativelyy lyess than 17% of government

spending in Australyia. This is alyso refected in the education aspect, where China

spends approximatelyy 2% of its GDP on education compared to more than 5% that

Australyia spends out of its GDP.

23
Role Of Government In China’s Economy:

 The Chinese government is ulytimatelyy responsiblye for plyanning and overseeing the

nationaly economy under China's communist polyiticaly and economic system. The

1982 State Constitution specifes very clyearlyy that the state shalyly guide the economic

develyopment of the country.

 It alyso states that the State Councily shalyly direct its subordinate bodies in the drawing

up and execution of the nationaly economic plyan and the state budget. A lyarge part

of the governmentaly apparatus was dedicated to managing the newlyy reformed

economy.

 The Chinese Communist Party's omnipresent infuence strengthened the

government's rolye in the economy. The party organisation structure was paralylyely to

that of government but alyso extended into individualy work units belyow the lyowest

lyevely of government.

 Important economic decision-makers at alyly lyevelys, from state councily members to

factory managers, were either party members themselyves or worked clyoselyy with

colylyeagues who were party members. The party acted as a strong additionaly

network to communicate and execute the Chinese Government's new economic

goalys and polyicies.

 China has however recentlyy been very relyuctant to discuss the government’s

economic plyans with internationaly alylyies such as the United States, Germany,

Australyia, UK etc., even though Beijing recognises that the market wilyly be better

driven with internationaly participation which woulyd indeed beneft the economy and

indulyge economic growth.

24
  In conclyusion, alythough the government dominates the economy (plyanned

economy), the sheer volyume of economic activity lyimited the extent of its controly.

 In addition, the concept of economic governance had changed-at lyeast in the minds

of reform advocates which state that government intervention alylyows the

production of goods and services to positivelyy impact the nationaly GDP. This further

drives economic growth in the nation which falylys upon improving other variablyes

such as qualyity of lyife etc.

Graph Annotations:

 As of the beginning of the 2003 fnancialy

year, the amount of Centraly Government

Owned enterprises decreased by 41.33%

from 196 to 115 by the end of the 2013

fnancialy year.

 As of the beginning of the 1998 fnancialy

year, the Chinese government decided to

reduce the amount of state-owned

industries.

 The biggest lyoss was for the government

emplyoyment sector which lyost around

40.7% of its emplyoyees across a period of

13 years due to the reduction/privatisation

25
Australia & China – Overview:
Australia China
Economic  Slower  Faster

Growth
 2019: 1.9%  2019: 16.2%
 GDP 2018  GDP 2018 larger:
smaller: US$1.4T US$13.6T
Quality Of Life  Higher HDI & GDP
per capita
 Lower HDI and
GDP per cap but
increasing
 2018 GDP/cap:  2018 GDP/cap:
US$57,300 US$9,800
 2017 life  2017 life
expectancy: 82.4 expectancy: 76.4
years years
Internal
Stability
Price Stability Infation: 1.6% (Jun 19) Infation: 2.7% (Jun 19)

Employment &  Unemployment:  Unemployment:

5.2% (July 19) 3.8% (June 19)
Unemployment
 Labour  Labour
Participation Participation
Rate: 66.1% (July Rate: 68.9% (Dec
19) 17)
 Services: 71.2%  Services: 51.6%
GDP GDP
Distribution Of  Fairer than China.  Less fair than
Australia
Income
 Gini 0.328 (2018)  Gini 0.467 (2017)

Environmental  Higher per capita

CO2 commissions
 Lower per capita
CO2 emissions

26
 Sustainability
Role Of  Taxes: 22.1% of  Taxes: 5.2% of
Government In annual GDP annual GDP
(2017) (2016)
Healthcare,
Education &
Social Welfare
 Health: 17.4%
government  Health: 9.1% of
spending government
spending
 Public spend on  Public spend on
education 5.2% education 1.9%
of GDP (2017) of GDP (1999)

Summary Of Case Study:

 Australyia is described as a mixed market economy, where there is a lyarge

degree of government intervention in the economy to smooth out business

cyclye fuctuations, promote competition and achieve socialy goalys inclyuding a

fair and equitablye distribution of income and environmentaly sustainabilyity.

 China woulyd be described as more of as a planned economy, with high

lyevelys of government intervention in the economy inclyuding centralyised

factor and product markets controly.

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