The Business Council of Australia commissioned this study of Australia’s trade and investment engagement with Asia to assess the strategic opportunities to enhance those relationships. For this purpose the study focuses on ten economies — China, India, Indonesia, Japan, Malaysia, the Republic of Korea, Singapore, Taiwan, Thailand and Vietnam — hereafter referred to as the Asia-10 for ease of reference.
The Asia-10 economies are growing at historically unprecedented rates. Since 2005 China, India, Singapore and Taiwan have each grown at more than twice the rate of the global economy and five of the remaining six economies had significantly faster rates of economic growth. Measured by bilateral trade and inward and outward foreign direct investment (FDI), Australia is well engaged with the Asia-10 but greater engagement is both feasible and desirable. In 2010 Australian exports to the group totalled $175 billion; the stock of Asia-10 investment in Australia was valued at $92 billion, while the stock of Australian investment in the Asia-10 stood at $23 billion.
Over the past five years Australia’s economic engagement with Asia has grown rapidly. In 2006 the Asia-10 took one-half of Australia’s exports; by 2010 it was nearly twothirds. Over the same period the stock of Asia-10 investment in Australia has more than doubled, while Australia’s stock of investment in the Asia-10 has nearly doubled. Although Australia’s trade and investment relationships with the Asia-10 have generally grown more slowly than their rates of economic growth, this is to be expected given Australia’s natural resource endowments and the impediments to their economic integration. The appropriate test is how much Australia has reduced its domestic impediments to engagement.
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