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Australia’s export concentration is posing an existential threat to its economy, according to a leading trade economist.

Andrew Charlton, former senior economic adviser to the Australian government and director at AlphaBeta advisers, a consultancy, compares the local economic structure to that of an impoverished nation, such as Bolivia, Botswana or Peru.

In the decade-long commodity price boom, which saw China consume the vast majority of Australian minerals such as iron ore and coal, the country became not just one of the wealthiest in the world, but experienced one of the most spectacular spikes in wealth in the history of civilisation.

However, successive governments pursued a strategy of further concentrating the exports base in favour of these sectors, in the hope that the boom would last forever. The past year has shown the folly of such thinking.

In the decade to 2015, Australian commodities averaged growth of 310% – a truly remarkable ascension, the likes of which have not been seen since the gold rush of the mid 19th century.

The Chinese government was investing 47% of its GDP in infrastructure projects in 2010. China’s expenditure was, according to Charlton, “capital expenditure on a scale the world has never seen”. In the years from 2011 to 2013, China used more cement than the United States used in the entire 20th century.

This unprecedented expansion was complementary to Australia’s strengths and the country’s resource exports grew from 30% of the total trade basket in 2000 to 52% in 2015.

However, the fall away in China’s domestic investment has stopped the growth in its tracks. By 2020 that figure will have fallen to 39% – still a large figure by any government’s reckoning, but a huge decline nonetheless. For every 1% decrease in China’s investment ratio, Australia will lose 0.2% of its GDP growth.

Australian commodity prices have fallen by 57% over the past two years, while its terms of trade – the amount of import goods an economy can purchase per unit of export goods – have fallen by 32%. The slide in the value of the Australian dollar plays into this scenario, but the main culprit is the decline in China.

In the years from 2011 to 2013, China used more cement than the United States used in the entire 20th century.

Chinese steel production and consumption, for instance, peaked last year and will fall by 27% in 2016. This is disastrous for a country which has ploughed so many resources – both human and capital – into iron ore production. The giant Roy Hill mine in Pilbara, Western Australia, for instance, has only just started producing, adding further produce to a market which is bursting with surplus.

Mining giants such as Rio Tinto, Vale and Glencore have for some time been pairing up in an effort to pool resources and weather the storm. But for small producers, the game has been up for some time.

Charlton’s view is that the overall economic picture in Australia is much bleaker than GDP statistics suggest. According to the Reserve Bank of Australia, the country grew at 3% last year, however with the huge increase in investment in Australian mineral and agricultural assets from China, this figure is skewed and is not representative of the actual picture.

GDP growth measures only volume: so a farm owned by Chinese investors that exports A$500mn per year adds that amount of capital to the Australian GDP figure, even though the money is likely to go to China.

Economists of a certain persuasion have long bemoaned and discouraged GDP evangelism, since it only measures pure output, no matter what form that output takes. The Deepwater Horizon oil spill in the Gulf of Mexico in 2010, for example, actually added to the US GDP of 2010 and 2011 due to the resources spent on the clean-up effort.

Charlton advocates the used of Real Net National Disposable Income (RNNDI), which is adjusted for the fall in volume or proportion of exports accrued to foreign ownership – an element of the Australian economy which is set to escalate with the signing of a series of free trade agreements over the past number of years. This, he claims, will allow for a more accurate representation of Australia’s economy.

While the GDP data looks relatively positive still, RNNDI has been languishing sub-zero since the mining boom broke in 2015. This is set to continue, given the lopsided nature of Australia’s economy and the fact that there is unlikely to be any recovery in commodity prices any time soon.

Once booming industries such as wine and pharmaceuticals were non-priorities under successive governments and, as such, lost their positions in the global markets to competitors from South America, in the case of wine, and South Asia, in the pharma market.

“Once an export market is lost,” Charlton says, “it takes a long while to get it back.”

Australians are notoriously chipper and self-deprecating, but even despite the smiles and jokes at GTR’s Australia Trade and Supply Chain Finance conference in Sydney this week, at which Charlton was speaking, the pessimism was clear.