Investment into Australia continues to defy GFC downturn 23 July 2010 The level of investment into Australia has continued to defy the Global Financial Crisis (GFC) downturn, according to the United Nations Council on Trade and Development (UNCTAD)’s just released World Investment Report 2010 (PDF). “Inwards Foreign Direct Investment (FDI) stock rose 7.4 per cent to US$328 billion and outwards FDI stock increased a substantial 43 per cent to US$343.6 billion in 2009," said Dr Matthew Durban, Austrade’s senior trade and investment analyst. "Australia’s share of our regional (South, East & South East Asia) stock and world stock of inwards FDI now stands at about 13 per cent and 1.8 per cent respectively,” Dr Durban said.
He added that Australia's FDI performance is indicative of the country’s growing importance within the Asia region. "The increased investment flows into China support the positive relationship to FDI flows into other Asian developing countries, especially ASEAN,” Dr Durban said. “This was recently tested by Chunlai Chen in the Australian National University’s China Update released earlier in the week." Dr Durban said that China's rapid growth will increase demand for resources and raw materials to support continuing production. “Both will generate opportunities for Australia via ASEAN to increase exports to and two way investment with Chinese markets. “The establishment of the ASEAN-China Free Trade Area (ACFTA) and inauguration of the Australia-New Zealand Free Trade Agreement (AANZFTA) in January this year will further cement this relationship.” Australia is the largest single country recipient of Chinese non-bond investment ahead of the US for the second year in a row [Heritage Foundation July 2010]. Global FDI has modest but uneven recovery The World Investment Report 2010 also noted that global FDI showed a modest but uneven recovery during the first half of 2010 and that was cautious optimism for FDI prospects in the short run, and for a full recovery later on. Global inflows are expected to reach more than US$1.2 trillion in 2010 and rise to US$1.3-1.5 trillion in 2011. However, the outlook for the global economy remains fragile and fraught with risk. The Report said that developing and transition economies attracted half of global FDI inflows and invested one quarter of global FDI outflows. More information |