Australia's population should be allowed to expand much bigger so the nation would have enough labour to capitalise on China's demand for commodities, according to economic commentator Niall Ferguson, who called the debate about curbing population growth pathetic.

Professor Ferguson said in the Diggers and Dealers mining conference in Kalgoorlie that this would be "the Chinese century" as the Asian superpower moves to oust the United States, which is submerged in debt, as the world's largest economy.

He believes that China has become the engine of expansion and Australia will keep gaining from its insatiable appetite for commodities, provided it has enough labour to meet this minerals demand.

"You've got to think about the strategic dependence," Professor Ferguson said.

"Your population is slightly less than the combined population of Beijing and Shanghai.

"You're small. There ought to be a debate about a bigger Australia instead of a pathetic discussion about traffic in New South Wales.

"The new world order is already here and it speaks Mandarin."

While Australia was at the mercy of the booming Chinese economy, India would ultimately become "the natural balancing power in Asia", he said.

"Empires tend to happen ... it starts with an interest in commodities followed by direct investment," Professor Ferguson said.

He said Australia was in the midst of the infamous "Dutch disease", when one sector dwarfed others so much it steer up costs.

A balance had to be struck because we now have a two-speed economy, he said.

"You have got vast deposits, not just iron," Professor Ferguson said.

"You have these wonderfully strong terms of trade. This is a happy land.

"But there's a blessing and a curse here."