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Workers remove covering from Australian iron ore at the port in Tianjin municipality
Workers remove covering from Australian iron ore at the port in Tianjin municipality
(VINCENT DU/REUTERS)

Australia cuts interest rate as mining slump prompts worries

An unexpected interest rate cut from Australia’s central bank, triggered by fears of a slowing mining sector, offers Canadians a glimpse of what to expect in the event of a prolonged economic slowdown in China.

For years, Australia’s economy has been powered by China’s strong growth. Because the two countries are so close together, China has been a heavy buyer of Australian iron ore and coal, propelling the Commonwealth country’s economy. Australia’s annualized GDP growth rate is 3.7 per cent, and its unemployment rate is only 5.1 per cent.