As the consequences of China's shock decision to allow its currency to fall begin to filter through, economists say Australia could be a winner from a more competitive China, if it can withstand the short-term pain. . 
St George chief economist Hans Kunnen said China will have to pay more for its imports but an increase in its more competitive exports will help stimulate the world's second-largest economy.
"We would see the benefits initially in the Chinese figures: stronger property demand and stronger steel output," Mr Kunnen said. "It should then come through in Australian exports [with] greater demand for iron ore and gas."
The short-term pain would be felt in Australia's manufacturing sector, which faced more intense competition from cheaper Chinese-made goods.
There are also worries a weaker yuan would have a global disinflationary effect and potentially delay the interest rate rise in the United States.
Any such delay could add upwards pressure on the Australian dollar, UBS economist George Tharenou said.