| Summary: | China is currently the world’s second largest economy and largest trading nation. She has risen to become the top trading partner of many countries and it has become inevitable that close trading partners of China will be influenced greatly by China’s growth and be dependent on her. The paper aims to examine the degree of trade dependence of Australia and Brazil on China in the period 2000-2012 based on the analysis of a few heavily traded commodities. A trade dependency index is used to determine the degree of dependence of Australia and Brazil on China. The results showed that they are largely dependent on China in a few specific commodities, namely iron ore and coal. Using Chow Test, the paper concluded that there has been a structural change from 1992 to 2012 on the world iron ore price. Particularly, the mid 2000s see the greater significance of China’s demand for iron ore, indicating stronger China growth since the 2000s. The paper then proposed policy recommendations to Australia and Brazil on ways to diversify reliance on China and ride on her growth instead, especially towards the services and agriculture sector for Australia and manufacturing and agricultural sector for Brazil.
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