So it’s as official as it can get: China’s economy is stuck in the slow lane and appears doomed to run slower still, after the nation unveiled its slowest GDP growth since the dark days of the global financial crisis in 2009.

This is just not the news that new Treasurer Scott Morrison, who has struggled to get out of the blocks, needed. Chinese growth is directly linked to Australia’s export performance, economic growth, Treasury’s tax receipts, the terms of trade and the exchange rate of the Australian dollar against other currencies.

Morrison has said that Australia has “a spending problem, not a revenue problem”. Wrong, Scott. Australia has both: the government, each government, every government, keeps spending more. Now that was fine for John Howard and even for the first iteration of Kevin Rudd, because the revenue side of things just kept getting better — when it dipped a little, Rudd gave it a bit of nudge.

It’s not just Morrison who should be concerned, but state governments — such as Colin Barnett’s in Western Australia and Annastacia Palaszczuk’s in Queensland — which rely on mining royalties to prop up state budgets.

The thing with China is not the actual number — yesterday’s quarter growth figure came in at 6.9%, a rounding error on the official “consensus” number of 6.8%. No one much believes any of China’s actual growth numbers — not anymore. And in the past, its statisticians have preferred to make the country’s growth curves a nice, steady glide. In this case, it gives the appearance of “management”.

But China’s reputation for economic management has taken quite a battering in recent months, with its rollercoaster sharemarket debacle in which government intervened but did nothing to fix, except blowing $100 billion or more and leaving the state with huge paper losses when it bought stock that might never recover.

China’s real growth rate , analysts say, could be as low as 4-5%.

Regardless, the trend is what Scott Morrison should be concerned about, because the trend is downwards — ever downwards. And that means altogether less revenue than forecast, and when the revenue line continues to be so uncertain, budgeting is a fiendishly hard business. Just ask Joe Hockey.

Prices in the mining sector, whose commodities prices propped up Australia’s economy through the global financial crisis continues to keep trying to find its bottom. For the links with China, look no further than China’s import figures last week, imports of key hard commodities that Australia produces — copper, zinc, nickel, coal — were down.

The best news was in iron ore, by far Australia biggest export, where China’s imports have moved precisely nil in the nine months to August 31, even as many of China’s high-cost iron ore mines have closed. But China is exporting more steel than ever before. This tells you all you really need to know about the Australia-linked part of the Chinese economy: it’s in the toilet. Steel demand is going backwards.

There is some way to go, although we have now reached the point where a range of mining companies are starting to mothball projects and get out of commodities in which they can see no future. Australia’s No. 2 export, coal, is poison right now, and will continue to be as cleaner energy alternatives continue their rise and the Paris climate conference that starts at the end of November refocuses minds on this. When Rio starts selling down its coal portfolio, clear the decks.

As Crikey noted recently, the Chinese have stopped investing in the mining sector, and it’s too soon to start doing counter-cyclical investment. Companies buying coal assets from Rio, for example, are extremely brave. The coal slump is both cyclical and structural, so the right analogy was the foolish private equity group who bought media assets from Kerry Stokes and James Packer back in 2007, as “old media” went into a structural death spiral, still playing out.

For all the specious “mining sector is not so important” commentary, well, it is.

Even if, in a parallel universe, Chinese growth suddenly stabilised, the fact is that China’s ruling Communist Party simply has to accelerate the restructuring of its economy. That ongoing restructure by China was plain is yesterday’s figures. And it was only services that played a role in helping to lessen the pain of the worst fixed-asset investment growth since 2000: miners, Morrison, again take note.

Where to go for China? It’s now two years since President Xi Jinping produced his bold laundry list of economic reforms. Not nearly enough boxes have been ticked; there’s a wall of internal pushback to deal with, and for every tentative step forward there’s a little shuffle back. The party, by definition control freaks, is unable to let go, as the sharemarket debacle showed so clearly. In doing so, they have lost control as well.

The annual summit of the ruling Communist Party — the so-called Fifth Plenum — is usually focused on personnel issues. After all, it’s now only two years until the elite seven-man Politburo has to find five new members due to current members passing the statutory retirement age at the next quinquennial Congress. This year the economy will be front and centre, and consumer consumption and services will be key — more bad news for Morrison’s revenue line. The fact that this piece of Soviet-era antiquity remains the centrepiece of the country’s economic policy illustrates how far from accepting the market Beijing really is.

“The upcoming five years will be much tougher than the previous ones,” JP Morgan Chinese equities chief Jing Ulrich said. And she’s a China bull.

And just in case anyone out there is inclined to swallow China’s line on its economy, take this excerpt from a directive from the party’s all-powerful (in the media, at least) propaganda department, sent to all major media outlets, translated care of the good folks at China Change:

“According to instructions from central leadership comrades, all news media outlets must continue to deepen their study and transmission of the spirit of Secretary-General Xi Jinping’s series of important speeches, revolving around the strategic positioning of the ‘Four Comprehensives,’ combined with deep concern for public opinion.

“The focus for the month of September will be strengthening economic propaganda and guiding public opinion, as well as overall planning for domestic- and foreign-facing propaganda and Internet propaganda, in order to take the next step in promoting the discourse on China’s bright economic future and the superiority of China’s system, as well as stabilizing expectations and inspiring confidence.”

Scott Morrison should be so lucky that Australian media will be so supportive unless he wakes up and smells the burning revenue coffee. And while he is going to need all the luck in the world, some brutal honesty would be a good start. Optimism is fine and, as Malcolm Turnbull has shown, it’s a message voters like, but it must be tempered by reality, because they are sick of all the bullshit.

An honest, well-informed conversation about our most important economic partner would be a great place to start.