The outlook for Australia's resources and energy sector is a mixed picture, according to the Government's December quarterly report on the sector.
The December 2017 Resources and Energy Quarterly report forcasts that Australia's resources and energy export earnings will grow to $214 billion in 2017-18 - it's a record but only in nominal terms.
And the problem is that this growth will only be short-term, despite export volumes of liquid natural gas (LNG) sharply increasing due to more gas produced at Gorgon, and the expected completion of Australia's three remaining major LNG projects (Wheatstone, Ichthys and Prelude) over the next two years.
Iron ore export volumes are also growing, but out to 2018-19 declining prices for iron ore on world markets will drive a significant decline in earnings - down to $52 billion - and overall decline in Australia's resources and export earnings - down to $200 billion.
There are two factors behind that. There is more iron ore available, from Australia but also increasingly from Brazil, and China is looking at giving its evironment a better go - and as a result is moderating steel production.
This will also effect our coal export earnings - especially metallurgical coal used mainly for steel production.
Consequently, the importance of LNG exports, with export earning forecast to rise to $36 billion in 2018-19, is on track to rival our largest export commodities, coal and iron ore.
According to the report, China accounted for $78 billion in resources and energy export earnings in 2016-17.
The nation's increasing income dependence on China is tightly linked to our iron ore and coal story, as also highlighted in a recent report by Austrade.
Over the past decade, iron ore and coal have almost doubled their combined share in Australia's total exports of goods and services. And so did China as an export destination.
In 2006-07, China imported less than15% of our exports.
In 2016-17, almost 30% of Australia's goods and service were sold to China alone (not including Hong Kong), and roughly 66% of all Australian exports of goods and services went to East Asia.
The Austrade report points out that "just as the composition of Australian exports is dominated by resources and fuels, the direction of our exports is (even more) dominated by East Asia in general and by China in particular."
More information: www.minister.industry.gov.au