Rising interest rates are more likely to threaten economic stability in Australia than any talks about a slowdown of the Chinese economy, according to a global fund manager.

"Australia is as vulnerable as the UK and Europe to a double dip on the consumer side if they raise interest rates," Axa Framlington lead portfolio manager and global strategist Mark Tinker said yesterday.

The Reserve Bank of Australia will hold its monthly meeting today and economists on average expect an increase in the cash rate of 0.25 per cent to 4 per cent.

Economies that have a high percentage of people with flexible mortgages are relatively vulnerable to changes in interest rates compared to economies that are centred on long-term loans, because domestic consumption is directly affected by interest rate changes.

"I wish there was a proper recognition about the dangers of floating interest rates," Tinker said.

Analagous to the emergence of "zombie banks" in Japan during the mid-1990s, Tinker spoke of the rise of zombie consumers.

"They've got this floating rate debt - if you raise interest rates you are going to completely kill them off," he said.

Tinker said Australia's domestic consumption has become a more prominent feature of its economic growth, as the country reduced its dependency on exports over the years.

He was less concerned about a slowing down of the Asian demand for Australian resources.

"Australia has clearly prospered from its proximity to Asia ... and that story is not going away," he said.

The shift in reliance on exports to the US to domestic consumption in China will drive the growth in the region.

"The number of times I heard: 'Oh, China can't recover unless everybody in America buys another television'. That is so narrow-minded - it's not about America anymore," Tinker said.

"There is a very important shift going on in China. China is shifting to the world's biggest consumption story," he said.

"The increase in number of dollars spent in consumption in China has dwarfed America in the last two years."

But this shift could provide challenges in the longer term for Australia, as it will change the focus from basic materials to more sophisticated products.

"Australia will start to slip, relatively, as the demands are further up the business-to-business manufacturing high-end materials rather than the basic materials chain," Tinker said.