Australia the next Spain?

The Australian Treasurer Wayne Swan is saying no and it may be an overstatement, but there are definitely some similarities. Spain also had a budget surplus (despite what austerity people believe) as well as strong jobs growth. What Spain did not have is a large export market heavily reliant on a booming China. During the good times, the economic ties were worth a lot to the Australian economy. But those good times are fading.

“It’s absurd - the Australian economy and its economic fundamentals are very strong. On a yearly basis we are growing at 4 percent – we are going to grow faster than any other developed economy this year and next,” Swan told CNBC's "Capital Connection" on Wednesday.

“Let’s go through the fundamentals – bringing our budget back to surplus in 2012-2013, low unemployment, strong job creation over time, a record investment pipeline in resources – half a trillion (dollars). What planet does he live on?” he added.

Xie, an independent economist with sometimes controversial views, argues that Australia is at danger of becoming the next Spain due to its reliance on foreign demand, especially from its biggest trading partner China, which he believes is decelerating faster than headline growth numbers suggest.