Increased imports of Chinese goods to Australia help mitigate inflation

A bunch of cheap Chinese goods is set to provide Australian consumers, concerned about rising prices, with some relief, as noted by Goldman Sachs analysts. 

Chinese e-commerce platforms, such as Alibaba's Taobao and JD.COM, have recently entered the Australian market to meet the demand for budget-friendly products.

The expected surge of cost-effective goods from China, coupled with a slowdown in inflation, has already contributed to the confidence of Australia's central bank in cutting interest rates this week.

Last year, Australia imported A$110 billion ($74.36 billion) worth of PRC products. Chinese trade data for April showed a 9% hike in exports to Australia from March, while shipments to the US saw a nearly 18% decline.

Goldman Sachs says that rerouting Chinese goods to Australia could lower inflation by 20–50 points over the next 1–2 years.

Consumer price inflation was consistent at 2.4% in the first quarter, well within the Reserve Bank of Australia's target range of 2–3%.