Chinese demand for Australia’s food and liquefied natural gas will only partly offset its waning appetite for iron ore, the Reserve Bank of Australia’s chief China-watcher said.

The central bank’s projections show that, as a result, resources will still account for a larger share of Australia’s commodity exports to China than food in the coming two decades, Ivan Roberts said in a paper released Friday. Iron ore is Australia’s biggest export earner.

“Relaxing some of our assumptions, however, we argue that there is scope for food imports to start eroding the importance of traditional resource commodities within the coming decade,” the report stated.

China and Australia are undergoing transitions to reshape the growth drivers in their economies as the world’s most populous nation tries to cut dependence on heavy investment that spurred massive demand for iron ore Down Under. Australia, in turn, is trying to encourage non-resources areas of its economy to pick up the slack left by the end of its mining-investment boom and a fall in key commodity prices.

Australia is completing the last leg of its resource bonanza as vast energy projects that are likely to see it overtake Qatar as the world’s largest LNG exporter come on line. Chevron Corp.’s $54 billion Gorgon LNG project, the biggest resource project in Australia’s history, began production this month.

“Increases in relative prices or greater penetration of Australian food and LNG exporters into the Chinese market” could underpin a faster rise in trade in these commodities, Roberts and co-authors Trent Saunders, Gareth Spence and Natasha Cassidy wrote in the paper.

The RBA’s projections used estimates of the historical relationship between the demand for commodities and income per capita for different countries.

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