Australia has been called many things: Oz; the land Down Under; the lucky country. But the equivalent of a collateralised debt obligation (CDO) Canberra can’t be happy to hear its AAA-rated economy likened to one of the reviled investment vehicles that blew up amid the 2008 global crisis. Yet the comparison is being made by some economists, who see the asset underlying Australia – demand from China – beginning to evaporate. No country is more vulnerable to the slowdown in China than resource-rich Australia. The mining boom that fuelled almost all of its recent growth is nearing a cliff of economic risk. “Australia is a leveraged time bomb waiting to blow,”...
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