Australia confident on trade with China despite market woes

China's stock market volatility does not pose a major risk to Australia's economy or undermine a landmark free-trade deal struck with Beijing that remains on target to be ratified by Canberra before the end of the year, Australian Minister for Trade and Investment Andrew Robb said yesterday.

"People have been saying now for months - major commentators - that there will be a correction in China. Well now there's a correction and everyone's flapping around as though the world has stopped," Robb told the en route to Beijing and Shanghai on a trade mission with 35 Australian CEOs in tow.

"The irony is that if there is some uncertainty - as there is, obviously - it is likely to encourage more investment out of China into Australia because we are seen as a safe haven," he added.

Two months of mainland stock market turmoil has wiped around US$5 trillion from the value of share prices, sent shock waves around the world, led global policymakers to urge calm and seen Beijing act repeatedly to shore up sentiment and stem the risk of damage being done to the wider economy.

Stopping wider economic rot is crucial to Australia as its biggest trading partner is China and its commodity producers are hugely exposed to the massive mainland market for mineral and industrial raw materials.

Falling mainland demand growth has helped sink commodity prices to 16-year lows as investor fears of a hard landing have intensified for the world's second-biggest economy and the largest single driver of global economic expansion.

Robb said it was clear that the mining boom, driven by massive construction needs in China and other emerging economies, was over.