Australia's economic future is almost completely tied to the Chinese economy, but rather than diversifying, companies should seek to increase their ties with the country, specialists have said.
"I spend a lot of my time out of Australia and it is very clear to me that what's going on in Australia - the strength of the economy, the strength of the stock market, the strength of the dollar - it is all tied to China," Russell Investments Asia-Pacific chairman Alan Schoenheimer said at last week's Russell Australian Investment Summit.
"In fact, it is almost dangerously tied to China, in that it is one bet. It is a one trick pony; it better not go lame."
More than a quarter of Australian exports are currently going to China and Australia is also the largest recipient of Chinese foreign direct investments (FDI).
"Australia is, in fact, the single largest destination for China's foreign direct investments going overseas," economic consultant John Larum said at the summit.
"This is taking out Hong Kong. Hong Kong is often used as a way to recycle funds back into the mainland."
But Larum argued China still had low outbound FDIs compared to western countries and Japan when setting it off against gross domestic product (GDP).
"There appears to be an image in recent times that China's huge outflows are now very substantial compared to other countries," he said.
"[But] the FDI stock is small compared to other countries, especially the US, France, the UK, Japan and even Australia, in terms of GDP, given China's trade involvement.
"It is, therefore, no surprise that China is increasing its FDI offshore. It is yet to pick up."
Australia was likely to attract more of those outflows, but the government needed to make a better effort in facilitating Chinese investments, he said.
"In a recent study I did, talking to Chinese investors and advisers, a consistent story was that Australia was seen as attractive. They want to be here for good reasons: they see a good, stable country and they like what is in it, minerals in particular.
"But it is seen as very difficult and the most difficult area was the process through the Foreign Investment Review Board.
"There were a few high-profile deals that failed and that was seen to the Chinese as failures because they were Chinese.
"So China sees Australia as difficult to do business with and I think the government needs to recognise that it needs to do more to back up the welcome message."
China recently announced its new five-year plan, in which it flagged the development of a national pension scheme.
The scheme will cover all of China's rural residents and 357 million urban residents.
"The five-year plan recommends building a social welfare system; they are going to build a pension system in five years. That provides an opportunity for funds management," BRIC (Brazil, Russia, India, China) specialist David Thomas said at the summit.
Asked if this meant Australia should become even more reliant on China, Thomas answered: "Yes, we're only scratching the surface."
