China…Recession…House Prices.

In recent weeks economists from a number of financial institutions have been making comments about the China slow down. They say it is official now that their manufacturing sector has slowed. What does this mean for Australia? Here are just a few of the sentiments being raised: China buys roughly a quarter of our resources but its slowing economy translates into less demand for raw materials like iron ore…Australia—which has gone 24 years without any severe downturn—may be about to face a recession, commonly defined as two straight quarters of contraction…Australia has had one of the longest economic expansions in modern history with a run of 96 quarters without a bust…it dipped into contractions three times in that period—in 2000, 2008 and 2011—but never for two quarters in a row…government figures show Australian businesses planning to cut spending by almost a quarter this fiscal year…the biggest recession risk comes from the massive amount of debt that has driven Australian house prices to unprecedented levels in recent years (Sydney prices have risen by close to 50% since May 2012)…liquefied-natural-gas, or LNG, projects coming online will give a big boost to GDP in the years ahead… if interest from Chinese buyers wanes due to the country’s deteriorating economy there’s a decent chance of recession over the next year.