particularly resources ) and services. a depreciation of the australian dollar in response to negative developments in external conditions could be expected to act as a buffer in the way that it has in the past. while i have focused today on a number of the downside risks, we should not lose sight of the fact that the central scenario over the next few years is for a gradual moderation of growth in china. and over the longer term, there is a lot of room for further development of the chinese economy, which will provide australia with many economic opportunities. while the value of non - rural exports to china have declined with the fall in commodity prices, the value of other exports to china have been rising strongly of late ( graph 11 ). we are likely to continue to benefit from rising incomes and the associated demand for high - quality food, goods and a wide array of household and business services from china and the region more broadly. graph 11 bis central bankers ’ speeches

glenn stevens : economic conditions and prospects – creating the upside address by mr glenn stevens, governor of the reserve bank of australia, to the economic society of australia luncheon, brisbane, 10 june 2015. * * * i thank elliott james for research assistance. thank you for the invitation to speak in brisbane once again. the last time i spoke with this group, in july 2013, the economy was estimated to be growing at about 2½ per cent. 1 underlying inflation was 2¼ – 2½ per cent, consistent with the target of 2 – 3 per cent. two years on, the economy is growing at just shy of 2½ per cent and underlying inflation is around 2¼ – 2½ per cent, consistent with the target. in some respects, then, it might seem that not much has changed. in fact a number of important developments have occurred during that period, some as anticipated and some not. overall, the fact that not much has changed is disappointing : the economy has not picked up speed as we had hoped. in this talk, i will make some observations about the global and domestic economies, and try to give some sense of what we have learned in the past couple of years. the global economy two years ago, we judged australia ’ s trading partner group to be growing at about its average pace of around 4 per cent. it was expected that during 2014 and 2015 growth in this group would pick up a bit, to a pace a little above average. in fact, growth for our trading partners has remained at about 4 per cent and is expected to stay there over the next couple of years. to be sure, 4 per cent growth is faster than growth for the world economy as a whole, which is more like 3¼ per cent. it has been to australia ’ s advantage that we have a high exposure, for an advanced country, to the faster - growing asian region. as an example, while the euro area is a significant trading partner for australia, we were probably less affected than many countries in 2012 and 2013 when europe lapsed back into recession. two years ago, i noted that the economy of the euro area was still smaller than it was before the financial crisis. regrettably, that remains true today. europe is back on a growth path now, but it is still a fairly modest one, and it seems to require extraordinary settings of monetary policy to achieve even that. growth has recently resumed in japan after a dip in activity following the enactment of a tax increase