Global Ties

Australia has an open and globally integrated economy, making it a trusted partner for trade and investment.

Nine of the top 10 Fortune Global 500 and eight of the top 10 Forbes Global 2000 companies have operations in Australia.

International companies can tap into Australia’s deep business and cultural ties with Asia to expand into or enter global value chains across the region. Australia’s free trade agreements facilitate the smooth flow of goods, services and investments with major economies across the globe.

Australia has an open trading economy where:

  • 10 of the country’s top 12 export markets are within Asia and Oceania
  • two-way trade in goods and services totalled A$763 billion in 2017
  • foreign investment stock totalled around A$3.6 trillion
  • inward foreign direct investment stock reached A$849 billion in 2017.
Top 5 trading partners: China, Japan, USA, Korea, India

Charts from the Benchmark Report

The Australia Benchmark Report provides rich data demonstrating why there is no better place than Australia to do business. The report examines five key reasons for investing in Australia – Robust Economy, Dynamic Industries, Innovation and Skills, Global Ties and Strong Foundations – and compares Australia’s credentials with other countries.

Charts can be downloaded and saved as images for use in reports and presentations (when using please reference www.austrade.gov.au)

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1.  Australia’s top 12 export markets
Australia’s links to Asian markets are more vital than ever. In 2017, 10 of Australia’s top 12 export markets were located in Asia and all were rated above investment-grade. Their combined value was around A$275 billion, making up more than 70 per cent of Australia’s total goods and services export earnings of A$387 billion in 2017. Since 2007, the total export value of Australia’s top 10 Asian markets has doubled.
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2.  Strong two-way trade
In 2017, Australia’s two-way trade in goods and services totalled A$763 billion, making up more than 40 per cent of nominal GDP. The Asian region accounted for around two-thirds of Australia’s total trade, with a strong compound annual growth rate of seven per cent since 2007. Nine of Australia’s 12 largest markets – with a total trade value of around A$453 billion – are in Asia and Oceania, reflecting the nation’s advantageous location and integrated economic ties.
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3.  Successful trading economy
Australia’s export volumes have continued to increase as the inflow of foreign direct investment (FDI) since 2007 translates into new production capacity. The nominal export value of goods and services surged by 15 per cent in 2017, with robust growth in mineral and fuel exports. Services exports increased by almost nine per cent in 2017 and contributed A$85 billion to export earnings, due to strong growth in education and tourism services.
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4.  High-growth destination for foreign investment
Australia hosts around A$3.6 trillion of foreign investment stock. FDI and other investment (including portfolio investment) have recorded strong growth, up 8.8 per cent and 9.3 per cent on average each year respectively since 1998. As a percentage of GDP, Australia’s total value of foreign investment stock reached 193 per cent in June 2018, almost double that of two decades ago.
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5.  Asia: a growing source of foreign direct investment
After an average annual increase of eight per cent over 2015 and 2016, Australia’s inward FDI stock value grew by around seven per cent to A$849 billion in 2017. As a percentage of GDP, Australia’s inward FDI stock was 47 per cent in 2017, up from 37 per cent in 2011. The USA and EU remain the dominant sources of FDI but there has been a solid increase in capital inflows from Asia, particularly China and the ASEAN region.
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6.  Australia: a top 10 destination for foreign direct investment
In 2017, Australia was the eighth largest recipient of FDI inflows, up one place from 2016. From 2011–17, Australia’s average annual FDI inflow was US$47 billion, compared with an annual average of US$28 billion over the previous seven years (2004–10). This represents a growth rate of 70 per cent over the two time periods, which raised Australia’s share of global FDI inflows to 3 per cent from 2011–17, compared to 2.2 per cent from 2004–10.
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7.  Services attract growing foreign direct investment
Around half of Australia’s A$849 billion worth of FDI stock in 2017 was invested in service-driven sectors. The sectors experiencing the most growth in FDI stock between 2016 and 2017 were real estate (up 20 per cent to A$91 billion), construction (23 per cent to A$25 billion) and utilities (39 per cent to A$22 billion). Mining, manufacturing and agriculture accounted for the other 50 per cent of Australia’s FDI stock in 2017.
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8.  The valuable contribution of foreign-owned businesses
Majority foreign-owned businesses made significant economic contributions to Australia’s mining industry (A$39 billion) and manufacturing industry (A$29 billion). The percentage of industry value added (IVA) was approximately 33 per cent for mining and 30 per cent for manufacturing. Other sectors that attracted major contributions included the professional, scientific and technical services industry (A$28 billion and 26 per cent IVA) and the wholesale trade industry (A$26 billion and 43 per cent IVA).
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9.  A welcoming destination for foreign-owned businesses
The latest figures from the Australian Bureau of Statistics (2014–15) indicate US-owned businesses made the largest contribution to Australia’s economy. EU-28-owned businesses also have a substantial presence in Australia, as do organisations from Japan. Many have developed longstanding investment relationships, built on a history of shared values and common approaches to global challenges.
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10.  Expanding network of free trade agreements
Australia currently has 11 free trade agreements (FTAs) in force with 18 World Trade Organization members. The countries covered by these FTAs account for almost 70 per cent of Australia’s total trade. With several FTAs under negotiation, the expanding network of agreements will provide a greater range of trade and investment opportunities and improve Australia’s position to take advantage of growth in the Asia-Pacific region. Investment frameworks established by these agreements also support a more attractive and predictable investment environment and help drive further economic integration in the Asian region.
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