Treasurer Scott Morrison will have a fresh bounce in his step after the latest figures showed that in the first three months of the year, the Chinese economy grew at its fastest clip in a year and a half, helped by a surge in industrial activity and a rebound in the property market.
Stronger Chinese growth has translated into a surge in earnings from commodity exports for Australia, with miners enjoying higher prices and a lift in sales.
And there's every sign that this good fortune will continue for some time, because Beijing is keen to keep the economic engine humming ahead of the ruling Communist Party's 19th National Congress in October.
Chinese President Xi Jinping is expected to use this key meeting to consolidate his grip on power.
To ensure that economic activity remains robust, Beijing has been leaning heavily on time-honoured growth drivers: higher infrastructure spending and a lift in investment by state-owned companies.
Indeed, while investment by private sector firms was up 7.7 per cent in the quarter from a year earlier, investment by state-owned companies grew nearly twice as fast.
And state-owned enterprises – particularly in heavy industries such as steel and cement – are set to enjoy a further boost from Beijing's plans to construct a new megacity a two-hour drive from Beijing.
At the same time, easy credit conditions have revived spirits in the property sector – which accounts for around 30 per cent of Chinese GDP when related industries such as construction are included.
Strong property sales meant that developers were able to clear out their backlogs of unsold inventories, which has encouraged them to start new construction projects.
This buoyant economic activity, however, comes at a price. Analysts warn that China's total debt is getting dangerously close to 300 per cent of the country's gross domestic product, and that most of this debt is concentrated in the corporate sector.
Shadow banking system
In the short term, there's little likelihood that this build up in debt will slow. Although the People's Bank of China has imposed some restrictions on bank lending, Chinese borrowers have rushed to the largely unregulated shadow banking system, where borrowing costs have fallen to their lowest level in three years.
As a result, although lending by Chinese financial institutions dipped to 1.02 trillion yuan ($190 billion) in March, overall lending rose. Total social financing – a measure which includes non-bank credit – climbed to 2.12 trillion yuan in the month, a steep rise from 1.15 trillion yuan in February.
But the big question weighing on the mind of Australian policymakers is how long Xi will continue China's debt-fuelled growth trajectory if, as expected, he emerges triumphant from October's important power battle.
He's already sent a strong signal of his dissatisfaction with the country's existing policy trajectory. Last May, the People's Daily – the Communist party's mouthpiece – ran a front-page article which quoted an unidentified "authoritative figure" warning about the country's dangerous debt dependency.
According to insiders, the article, which was written by one of Xi's key economic advisers, reflected Xi's determination to address China's deep-seated economic problems, rather than continuing to rely on short-term state stimulus measures to support growth.
Xi's economic reforms are expected to include a restructuring of the economy, reducing its dependence on heavy industry and debt-fuelled investment and shaking up loss-making state-owned enterprises.
But these reforms are likely to prove hugely disruptive to growth, at least in the short term. Inefficient plants, particularly in smokestack industries like steel and shipbuilding, will have to be closed, which will involve significant job losses.
And analysts warn that any determined effort to rebalance the Chinese economy away from heavy industry and construction could weigh on the country's demand for resources, triggering a renewed period of turbulence in commodity markets.
