Chapter 5 - Australia’s position in international trade and investment. The main goals of this chapter are to: Examine the changes in Australia’ position in the world economy, in terms of size and income per capita; outline the main changes in Australia’s geographic distribution of exports and imports and identify the main reasons for those changes; analyse the role of foreign direct investment in Australia’s economy.
Chapter Australia’s position in international trade and investment Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–1 Lecture plan • • • • • • • Australia’s position in the world’s GDP and in terms of income (GNP/GNI) per capita Australia’s merchandise trade with the rest of the world Comparative trade indicators Australia’s position in the services trade Australia as a destination of FDI Australia’s direct investment abroad Australia’s top global corporations Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–2 The world’s largest economies (GDP in 2003 US$b.) US 10,881 Canada 834 Japan 4326 10 Mexico 626 Germany 2401 11 Korea Rep 605 UK 1795 12 India 599 France 1748 13 Australia 518 Italy 1466 14 Netherlands 512 China 1410 15 Brazil 492 Spain 836 World GDP: 36,460 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–3 GDP of economies represented in our MBAIM, US$ billion (world ranking) WORLD Atlas method PPP method - Australia : US$522b (13) - Australia : US$589b (16) - Hong Kong : US$127b (30) - Malaysia : US$236b (34) - Malaysia : US$104b (37) - Hong Kong : US$185b (40) - Singapore : US$91b (38) - Singapore : US$104b (54) Source: World Bank at www.worldbank.org/data/databytopic/ Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–4 Australia's rank in GNP/GNI per capita (2003: US$21,650): World Bank Atlas method Australia’s Rank 15 19 27 27 Year: 1960 1977 1991 1995 2000 2003 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–5 Australia’s position in international trade 1980, 2000, 2003 Indicators Rank 1980 Rank 2000 Rank 2003* % of World 2003 Merchandise exports 18 25 26 (17*) 0.9 (1.2*) Merchandise Imports 19 20 19 (12*) 1.1 (1.5*) Services exports 23 21 25 1.2 Services Imports 14 22 21 1.2 * excluding intra-EU trade, with EU as an entity Source: adapted from Table 5.1 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–6 Exports of goods and services as a % of GDP, selected economies, 2003 174 Singapore 116 Malaysia 144 Hong Kong 26 China 37 44 Canada Sweden 29 New Zealand 18 Australia 50 100 150 200 % of GDP Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–7 Australia’s merchandise trade, 1993–2003, US$ billion 100 90 U S $ B illio n 80 70 60 Exports 50 Imports 40 30 20 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 10 Source: adapted from WTO Annual Report 2004 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–8 Australia’s top 10 merchandise export markets, % of total exports, 2001–03 18.6 Japan 9.4 7.9 7.2 6.7 5.2 4.0 4.0 3.0 2.6 US Korea Rep China New Zealand UK Singapore Taiwan Hong Kong Indonesia % Source: adapted from DFAT, Australia Economic & Trade Statistics, July 2004 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–9 Composition of Australia’s merchandise exports and imports, primary products, manufactures, other, 1991, 2003, % of total 70 60 40 1991 30 2003 20 10 Primary products Manufactures Other %oftotal im ports % oftotal exports 50 90 80 70 60 50 40 30 20 10 1991 2003 Primary products Manufactures Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 Other 5–10 Hirschman concentration index for Australia’s merchandise exports Year Hirschman concentration index 1974 0.333 1984 1994 0.315 0.300 2003 0.266 Source: Calculated from data in DFAT, Direction of Trade Time Series, various editions Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–11 Share of intra-industry trade in Australia’s merchandise trade, 1991, 2003, by SITC category SITC Section SITC SITC SITC SITC SITC SITC SITC SITC SITC SITC TOTAL T (1991) T (2003) 35.4 92.2 16.1 42.7 98.6 45.2 92.2 36.4 32.8 32.9 42.4 48.1 53.6 17.6 64.0 95.7 51.6 83.7 34.8 37.9 30.7 45.5 Source: Calculated from ABS data, International merchandise Trade (Cat No.5422.0) Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–12 Australia’s services trade, US$ billion, 1993–2003 25 US $ Billion 20 15 Exports Imports 10 Source: WTO Source: adapted from WTO International Trade Statistics 2004 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–13 Australia’s services exports by main category, as % of total services exports, 1990, 2002 60 40 20 Insurance& Computer/i Financial nfo/comm'n Transport Travel 1990 35.5 43.2 4.2 17.2 2002 23.9 49.2 5.1 21.8 Source: adapted from World Bank, World Development Indicators, 2004 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–14 Australia’s rank and % share in the world’s foreign direct investment, 1980, 2003 Indicators Rank 1980 Rank 2003 FDI outflows % of World FDI 2003 10 2.5 FDI inflows 17 1.4 FDI outward stock 14 1.6 FDI inward stock 11 2.1 Source: adapted from Table 5.1 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–15 Australia’s FDI outflows and inflows, US$ billion,1991–2003 16.0 14.0 12.0 10.0 US$ Billion 8.0 6.0 4.0 2.0 0.0 -2.0 19911997 1998 96 1999 2000 2001 2002 2003 FDI Inflows 6.2 7.7 6.0 2.9 13.1 4.0 14.0 7.9 FDI Outflows 3.6 6.4 3.4 -0.7 0.6 11.0 6.8 15.1 Source: adapted from UNCTAD, World Investment Report 2004 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–16 Foreign investment in Australia by source, % share, as at end of 2003 Source: adapted from ABS, Catalogue 5352.0, 20 July 2004 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–17 Australian outward foreign affiliates of 641 Australian enterprise groups, 2002–03 Indicator Foreign Affiliates by Region Europe Number of affiliates 976 AsiaPacific Americas 1708 1328 Employment by foreign affiliates 64,928 186,23 70,757 Revenue from sales of goods and services (A$ million) 31,324 55,955 55,131 Source: ABS 5368.0 Year Book Australia Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–18 Australian companies on Fortune’s top 500 global corporations, 2003, US$b and rank Company News Corporation 7.5 Rank 295 Coles Myer 6.0 324 National Australia Bank 5.8 332 Woolworths 5.7 340 BHP–Billiton 5.6 341 AMP Telstra 3.5 2.6 405 430 Revenues US$b Source: adapted from Fortune Magazine, 26 July, 2004 Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5–19 ... McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5 5 Australia’s position in international trade. .. 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade and Investment: An Asia-Pacific Perspective 2e by Gionea Slides prepared by John Gionea 3 5 7 Australia’s merchandise trade, 1993–2003,... 70, 757 Revenue from sales of goods and services (A$ million) 31,324 55 , 955 55 ,131 Source: ABS 53 68.0 Year Book Australia Copyright 2006 McGraw-Hill Australia Pty Ltd PPTs t/a International Trade