LAUNCESTON, Australia, July 1 (Reuters): Australia still has the Union Jack on its flag and the British queen on its coins, and was once described as the US "deputy sheriff" in Asia, but the real dependency relationship is with China.
Nowhere is this reality made more clear than in the quarterly outlook by the Bureau for Resources and Energy Economics (BREE), the government agency responsible for commodity exports and other forecasts.
In the 2002-03 fiscal year, the biggest buyer of Australian resource and energy exports was Japan, which took 15 per cent and 39 per cent of the respective totals, according to BREE's Resources and Energy Quarterly published June 25.
China was the fifth-biggest buyer of resources and sixth for energy, with a share of 8 per cent and 3 per cent respectively.
But by the 2012-13 fiscal year, China had accelerated into the top buyer of resources, with dominant share of 52 per cent, and was second in energy purchases, taking 15 per cent, behind Japan's 41 per cent.
It's also likely that in years to come China will replace Japan as the top buyer of energy exports from Australia, given that Japan's imports of liquefied natural gas (LNG) are probably at their peak, while China is just starting to ramp its purchases of the super-chilled fuel.
Australia has seven LNG plants currently under construction, and by the time these are all operational around 2018, LNG will become the nation's second-biggest commodity export, trailing only iron ore.
Resource and energy exports accounted for 70.2 per cent of all exports in 2012-13, up from 48.9 per cent a decade earlier, underscoring just how vital commodity exports are to Australia's economic wellbeing.
The strong growth of exports to China has continued in the 2013-14 fiscal year, with trade data showing exports reached A$101.4 billion ($98.07 billion) in the first 10 months of the fiscal year to end-April, a gain of 31.9 per cent over the same period a year earlier.
Australian imports from China have also been gaining, but at a much slower pace, rising 11 per cent to A$49.5 billion in the first 10 months of the 2013-14 fiscal year.
This leaves a record trade surplus with China of A$50.9 billion for the first 10 months, translating as CommSec Chief Economist Craig James put it, to more than A$2,200 ($2,079) for every Australian.
In contrast, the US trade deficit with China was $179.6 billion for the 10 months from July last year, equivalent to about $577 for every American.
There is little doubt that Australia's current economic wealth is very much related to China's rapid urbanisation and its surge in commodity imports over the past decade.
