rudd warns of loss of exports to china

By Online parliamentary correspondent Emma Rodgers

Australia may lose $5 billion of exports to China. (ABC TV News)

Prime Minister Kevin Rudd has warned that $5 billion of exports may be lost from China as the global financial crisis slows its economy.

Figures released today showed China's growth rate fell to 6.8 per cent last quarter, pushing growth down to a seven-year low of 9 per cent.

Giving the John Batman Australia Day oration in Melbourne this afternoon, Mr Rudd reiterated his message that the country had to take coordinated action against the crisis.

"China's economic recovery is as important for Australia's recovery as it is for America's recovery," he said.

In his second speech on the economy today, Mr Rudd also defended the Government's recent spending measures to pump prime the economy, saying the costs of inaction would be "extraordinary".

"This Government will not sit on its hands while Australians lose their jobs, superannuation and house values," he said.

"We will act to get the blood pumping around the economy again; that is what stimulus is all about."

Last year the Government spent over $10 billion in measures to boost growth, but is facing increasing pressure from industry and unions to take further action against the negative effects of the global financial crisis.

Thousands of jobs were also lost across the country yesterday in the mining and retail sectors.

The Government is considering more stimulus measures.

It is yet to commit to any further packages but earlier this week Mr Rudd pledged to do step in to fill any gap made by the refusal of foreign banks to renew loans with Australian businesses.

Dave R.