Continued economic integration with Asia leads Australia’s total trade to exceed A$670 billion

14 Jun 2017

Tags

  • Edmund Tang
  • Australian Economy
  • International Trade

The value of Australia’s exports of goods and services grew by almost five per cent year-on year to A$330 billion in 2016, while imports dropped around three per cent to A$342 billion over the same period. After growing by 0.9 per cent in 2015, Australia’s two-way trade with the world increased by 0.7 per cent year-on year to A$673 billion in 2016. Trade in 2016 was around 40 per cent of Australia’s GDP, up from 32 per cent in 1990. Trade growth was underpinned by strong demand in the markets of Greater China (China, Hong Kong and Taiwan) and India for our goods and services, which saw two-way trade rise by four per cent and five per cent to A$185 billion and A$21 billion respectively in 2016. Also boosting total trade growth last year was our two-way trade with European markets, which surged by nine per cent to A$109 billion (mainly due to strong exports to the UK and Germany).

The Asian region accounted for 62 per cent of Australia’s two-way trade last year, with a compound annual growth rate of 5.6 per cent over the past decade. The regional share was sharply up from 55 per cent a decade ago. In A$ terms, our trade with Asia has jumped by a massive A$175 billion over the past ten years. On the other hand, the European and American combined share declined to 28 per cent from 33 per cent over the same period, though the value of our two-way trade with these two regions remained strong, up almost A$48 billion. Twelve of Australia’s fifteen largest markets are now within the Asia region with a total combined trade value of around A$410 billion, reflecting our strategically competitive location and increased economic ties within the fast-growing Asian region.

The top five Australian two-way trading partners in 2016 (together accounting for 51 per cent of Australia’s total trade value) were:

  • China, valued at A$155 billion (up 4 per cent on last year), accounting for 23.1 per cent of total trade. China remained Australia’s largest two-way trading partner, export market and import source;
  • The US, valued at A$64 billion, down 8 per cent on last year (9.6 per cent of total trade). The US continued to be Australia’s largest two-way services trading partner;
  • Japan, valued at A$61 billion, down 6 per cent on last year (9.1 per cent of total trade);
  • South Korea, valued at A$32 billion, down 11 per cent on last year (4.8 per cent of total trade); and
  • The UK, valued at A$29 billion, up 25 per cent (mainly due to increased gold exports) on last year (4.3 per cent of total trade). The UK, up from the seventh largest two-way trading partner, overtook New Zealand and Singapore as Australia’s fifth largest two-way trading partner.

The top five Australian exports of goods and services by commodities (together comprising 47 per cent of Australia’s total export value) were:

  • Iron ores and concentrates, valued at A$54 billion (up 9.4 per cent), accounting for 16.3 per cent of total exports;
  • Coal, valued at A$42 billion (up 14.3 per cent), accounting for 12.8 per cent of total exports;
  • Education-related travel services, valued at A$22 billion (up 17.7 per cent), accounting for 6.7 per cent of total exports;
  • Gold, valued at A$19 billion (up 30.0 per cent), accounting for 5.7 per cent of total exports; and
  • Natural gas, valued at A$18 billion (up 8.9 per cent), accounting for 5.4 per cent of total exports.

The top five Australian imports of goods and services by commodities (one quarter of Australia’s total import value) were:

  • Personal travel services (excl. education) - mainly recreational travel, valued at A$29 billion (up 5.7 per cent), accounting for 8.4 per cent of total imports;
  • Passenger motor vehicles, valued at A$21 billion (up 5.1 per cent), accounting for 6.3 per cent of total imports;
  • Refined petroleum, valued at A$15 billion (down 19.6 per cent), accounting for 4.3 per cent of total imports;
  • Telecommunication equipment and parts, valued at A$12 billion (up 2.5 per cent), accounting for 3.5 per cent of total imports; and
  • Freight transport services, valued at A$9 billion (down 14.2 per cent), accounting for 2.6 per cent of total imports.