Core arguments and facts of the 2018 Benchmark Report: Global Ties
08 Mar 2018
- Benchmark Report
- Australian Economy
Following my previous post, where I discussed the topic of
Innovation and Skills, I would like to look in more detail at another key strength of Australia
highlighted in the
– Global Ties.
Australia is a globally integrated economy and the country is deeply
connected through geographic proximity, trade, investment, tourism and
cultural links with the dynamic Asian region. Australia’s experience and
free trade agreements facilitate the smooth flow of goods, services and
investments with major economies across Asia, Europe and North America.
economic resilience, together with its strategic location, increased global trade and
investment ties, and
business friendly environment, continues to position Australia as an attractive investment destination
within Asia Pacific.
Another Australian strength is our time zone advantage which bridges the
world’s major time zones, offering 24-hour access for organisations with
Australia’s strong global ties reflect
Successful Trading Economy
. Australia’s export volumes rose by 5.4 per cent in 2016-17, with
volumes of minerals & fuels up over five per cent, rural goods up
12 per cent and services up about eight per cent, according to the
Composition of Trade, Australia
, released by the Department of Foreign Affairs and Trade. In value
terms, Australia’s total export of goods and services grew by 17 per
cent in 2016-17, with robust growth in minerals and fuels (33 per cent)
and rural goods (8 per cent). Services exports increased by over eight
per cent in 2016-17 and contributed A$82 billion to export earnings,
thanks to strong growth in education and tourism services ( see table below)
Strong Asian Connection.
two-way trade in goods and services
in 2016-17 totalled A$735 billion, making up 42 per cent of nominal
GDP. Twelve of Australia’s 15 largest trading partners – with a total
trade value of A$463 billion and a total market share of 63 per cent –
are located in Asia, reflecting the nation’s competitive, strategic
location and growing economic ties with the dynamic, fast-growing
region (see table below).
High-Growth Destination for Foreign Investment.
Australia presently hosts around A$3.3 trillion of foreign investment
stock. Both foreign direct investment and other investment (including
portfolio investment) have recorded strong growth, up 8.6 per cent and
9.7 per cent on average each year respectively since 1997. As a
percentage of GDP, Australia’s total value of foreign investment stock
reached 185 per cent in June 2017, double that of two decades ago ( see table below).
Top Destination for FDI.
Australia is one of the world’s top destinations for foreign direct
investment (FDI), receiving a 2.2 per cent share of the global stock of
FDI in 2016. According to UNCTAD’s
World Investment Report, Australia was the world’s eighth most popular destination for global
FDI flows in 2016 (up from 16th in 2015) ( see table below).
Asia a Growing Source of FDI.
After a seven per cent rise per year in 2014 and 2015, Australia’s
inward FDI stock value grew by around nine per cent to A$796 billion in
2016. Traditional sources of FDI continued to perform well: the USA,
Japan and the European Union remain dominant sources of FDI. In recent
years, there has also been a solid increase in capital inflows from
Asia, particularly China and the ASEAN region, reflecting Australia’s
close ties to these fast growing nations (see table below).