China is the new Japan: economist

The world's most populous nation, China has become Australia's main export market, displacing Japan which had been in the top spot since 1966-67.

CommSec economist Craig James said in the year to February 2010, Australia exported just over $42 billion of goods to China but only $35 billion of goods to Japan.

"Australia's dependence on the Chinese economy has become more entrenched," Mr James said.

"Latest data shows that China is now clearly Australia's main export destination, displacing Japan which has held that role for the past 43 years.

"Australia and China's co-dependence will only grow in coming years, highlighting the need for businesses, investors and government departments to focus on the opportunities of the growing relationship."

He said the big difference is that China has 1.3 billion people, creating a huge demand on resources as the economy grows, and huge opportunities for Australia.

Meanwhile Australia imported $35.8 billion from China in the past year, $21.7 billion from the US and $17.1 billion from Japan.