ASEAN: here comes the neighbourhood
Trade data for 2015-16 shows the ASEAN region continues to be an important trading partner for Australia - greater in significance than some might expect.
ASEAN is currently a ‘top three’ trade, export and import market. In terms of total trade values, the region’s trade with Australia accounts for $93 billion in transactions which ranks it third behind Australia’s other major two-way trade partners China ($150 billion) and the European Union ($96 billion).
When we consider trade data it is clear that ASEAN has managed to carve out a position as a dominant trading partner for Australia with strong growth prospects. Although individually most ASEAN markets appear outside the top ten rankings for Australia’s export destinations, key ASEAN markets dominate the rankings from nine to fifteen, and when combined the region exhibits scale.
With a basket of drivers ranging from economic prosperity through to demography, the promise of greater economic policy co‑ordination and infrastructure linkages within the region, ASEAN neighbours offer Australian businesses diverse growth prospects close to home.
A strong record of two-way investment is generally considered an important sign of the maturity of economic relations, and on this measure ASEAN performs relatively well. With $44 billion worth of direct investment stock in 2016, the region ranks second, after Japan ($91 billion), as the most important Asian direct investor in Australia. ASEAN holds claim to larger investment stock in Australia, than our leading trade partner, China.
Around 70 per cent of ASEAN investment in Australia is accounted for by Singapore. The five year CAGR for direct investment from China is 23 per cent compared to 9 per cent for direct investment from ASEAN.
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