Determinants of China's import demand for Australia's iron ore

This paper analyzes China's imports of iron ore from Australia, using annual time series data for the period 1973-1996. Considerations include variables affecting iron ore trade between the two countries, such as the previous trade volume, GDP growth rate and steel production in China, labor disputes in Australia, the relative price of Australia's iron ore to the world average, and Chinese government policies. Results indicate that China's import of Australia's iron ore is positively affected by the volume of steel production in China and Chinese government's policy following the cultural revolution era. Increases in the relative price of Australia's iron ore and labor disputes measured by the working days lost in Australia appear to reduce China's import demand. (C) 1999 Elsevier Science Ltd. All rights reserved.