HSC Economics - Topic 2: Australia's Place in the Global Economy


VALUE, COMPOSITION AND DIRECTION OF AUSTRALIA’S TRADE AND FINANCIAL FLOWS

International trade refers to the exchange of g+s across national borders & also involves

financial flows such as debt and equity borrowings known as international investment. It is characterised by trade in more than once currency, special risks, affected by IBC and technology and dominated by TNC’s.

Trends in Australia’s Trade Pattern

Since the 1980’s Aus. has become more internationalised and integrated (due reduction of trade barriers, participating in international forums, financial system de-regulation, FOREX controls lifted, AUDs floated, and improvements in technology and communication) into global economy & as a result ratio of imports and exports to GDP has increased.

Australia’s has diversified its export base & moved from exporting just primary commodities to primary exports (mining and agr) 48.7% , manufactured goods (ETMs & STMs) 30% , and services (tourism, travel, freight transport, education, finance) 21.3%.

Aust’s imports of g+s has also changed from just consumer goods(food, cars, luxuries)

25.1% to include intermediate goods(goods used in prodn) 33.4%, capital goods 19.1% and services 19.7%.

Major change in Aust’s trade relations over last 40 yrs. was the switch away from UK & European markets to Japan & Asia and recently slight shift back to US after Azn financial crisis. The shift to Asia was because they experienced sustained growth in incomes, geographic proximity and resource complementation with Australia.

NE Asia is Aust. chief exporter including Japan (40.7%, 18.8%) followed by ASEAN, EU and USA.

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