The Reserve Bank of Australia (RBA) said on Thursday that the country is already out of sync with the US economy and has slowly shifted its focus on the movements of the fast-expanding Chinese economy, currently the nation's biggest trading partner and largest consumer of its natural resources.

Speaking before the NatStats 2010 conference held in Sydney, RBA assistant governor for economics Dr Philip Lowe said that relying too much on emerging economic powers such as China and even India could posed serious risks and challenges for the local economy.

Dr Lowe noted that while the seeming synchronicity that used to exist between the US and Australian economy slowly dwindled during the past few years, the relative movements between the Australian and Chinese gross domestic product (GDP) gradually increased and reached a point where "the Australian economy is now more dependent upon what happens in China than has been the case at any time in our past."

Such development, the assistant governor, cautioned could bring about equal amounts of benefits and difficulties for Australia as the two emerging powers muscle their way to further economic developments.

Dr Lowe pointed to the challenges being encountered by Chinese economic policymakers in rechanneling growths achieved from the export sector to local investments and domestic consumptions while India struggles to meet expansion with the need to upgrade its infrastructure facilities and bureaucratic inefficiencies.

Failure by the two powers to effectively fine-tune their economies to adequately meet the requirements of advanced prosperity could lead to dire consequences for the Australia, which Dr Lowe said has increasingly gravitated towards an unhealthy reliance on Beijing's financial performance.

Inevitably, the RBA official said that commodity prices would settle at a moderate level as more sources outside of Australia would come into play while the introduction of better technologies could lead to a faltering demand for the country's major export offerings of coal and iron ore.

However, with the spectre of a declining prospects coming from the mining industry, Dr Lowe said that the country could still take advantage from the anticipated upsurge in global demand for food supplies, stressing that "over the years ahead it is quite likely that global demand for protein will grow strongly, particularly if India and China continue on their current paths."

Dr Lowe expressed confidence that "with Australia's strong history of agricultural production, this is another area where we have an advantage."