China, Coal and Australia

Energy Strategist (11/04/2009)
"On November 4, the Reserve Bank of Australia hiked its interest rate a quarter of a point to 3.50%, the second increase in the past four weeks. The decision made Australia the first developed country to begin to tighten its monetary policy.

This is a clear indication that Australia is recovering faster than the rest of the developed world. The reason is obvious: Australia is rich in natural resources, and trade in these resources is booming because of strong demand from countries like China and India.

Australian-Chinese relations looked strained earlier this year. But rhetoric on the heels of high-level meetings between the two nations suggests that both countries are working to patch things up. Such a repair would be mutually beneficial: China needs Australia's coal and other resources, and Australia's economy benefits tremendously from China's demand for its resources. . ."

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