Australia's proposed tax on mining Companies is a major step and it will definitely have severe impact on them. People, who are suggesting the resource tax, apparently believe that circumstances of recent year, with increasing raw material demand from countries like China will carry on.

British Hedge Fund Manager, Hugh Hendry believes that China is in the middle of a credit bubble, which will make its economy to contract and set off a universal crisis. He also comments that in the past 16 months China has made US$1.9tr of new lending.

"There are striking parallels with Japan in the 1920s, when ultimately the whole system collapsed. China could precipitate a much greater crisis elsewhere in the world", he told Bloomberg recently.

If the guesses of Hendry are correct that America's economy will contract from US$14.6tr last year to US$10tr in the next ten years, then those who think China will keep on doing well by selling its products to USA should think again.

As the sluggish Chinese economy cuts demand for supplies, Australian shares will be the major losers in the Asia-Pacific province, this year. Even, the economy of China will be slow as the country is already making efforts to keep a lid on the uncontrolled property prices.