The current fall in world sharemarkets had better not spark a major decline in China because the Australian economic dependence on the Chinese has reached a level that is without precedent.

We all recognise the importance of the mining boom but few understand that our elaborate carbon tax proposal pivots on China’s prosperity (Gambling on investment in a risky climate) as does our dwelling market, agricultural land prices and, indirectly, our banking system.

Yesterday, I was yarning to Harry Triguboff, the largest apartment owner and developer in Sydney and a major player in Brisbane and the Gold Coast. He tells me that more than 80% of the apartments he is selling in Sydney are bought by mainland Chinese buyers. There will be a similar pattern in Melbourne. The Sydney apartment market is down about 10% but, without the Chinese buying, apartment prices would fall sharply leading to a significant decline in eastern states dwelling prices.

The Chinese have made a lot of money in China and want to have investment diversification in a stable country such as  Australia. They normally do not borrow from our banks. The Chinese use the apartments either for their children to occupy while they are students here, or they rent them.

The Chinese are also major purchasers of agricultural property.

What curbs the level of their apartment purchases is the high level of the Australian currency — the Chinese are nervous that the Australian dollar will fall and cause them major loss.

On the Gold Coast, Chinese tourists are the main renters of serviced apartments. Even though it is expensive, the Chinese are coming to Australia because of the fresh air and open space we offer. Like our dwelling prices, without the Chinese, our depressed tourist industry would be in tatters.

Hypothetically, let’s imagine China goes into a downturn. There will be a slump in mineral prices that will not only hit Australian taxation revenue but make it impossible to pursue the carbon agenda because our coal, LNG and other resource companies will not have the profits to pay the carbon-based resource tax.

The fall in eastern states apartment prices and in wider areas of the dwelling market would boost problem debts in our banking system.

But the emergence of Chinese residents as major landlords in dwellings and on farms is having social ramifications. Young Australians are finding that apartments are too expensive and are either renting or moving to outer suburbs.

I am not sure whether the Australian community fully understands that, whether it be our minerals, carbon tax, dwellings, farm land or banking, our world is shaped by China.

*This first appeared on Business Spectator.