AUSTRALIA is facing the worst economic news since the start of the global financial crisis - a dramatic slowing of the Chinese economy.
A day after BHP sacked 3300 Australian workers, figures showed China's annual growth slumped to 6.8 per cent - down from 9 per cent, according to the Herald Sun.
Government insiders said the figures were a disaster.
The painful contraction will smash raw materials exports and play havoc with the May federal Budget.
But the true picture could be even worse - analysts said the figures could mask negative growth in the Chinese economy in the December quarter last year.
Prime Minister Kevin Rudd yesterday raised warnings of how bad things could be.
"(This year) will test us all," he said at an Australia Day lunch in Melbourne.
"It will test governments - national, state and local."
Access Economics chief Chris Richardson said Australia would be hit hard by the Chinese slowdown.
"It's all changed so fast the average Australian doesn't get it," he said.
"This is a very, very sharp global downturn. Almost every single nation is slowing fast. Jobs will be slashed. Profits will be slashed."
ANZ chief economist Saul Eslake was also pessimistic.
"(It) increases the likelihood that Australia will now experience a recession," he said.
Read more at the Herald Sun online
