Despite the tough markets around the world, Australia has taken a deliberate strategy of diversifying beyond a reliance on resources, but at a careful and gradual pace. Export volumes remain relatively healthy and recent increases have helped prop up overall economic growth. The Australian economy grew more than expected in the third quarter of 2015 based on a dramatic increase in mining output. Despite overall growth figures not significantly outperforming the rest of the developed world, the country has enjoyed relative stability and is now in its 25th year of continuous growth.
Similar to China, the Australian economy is in the midst of a strategic transition from export orientation to a focus on domestic growth drivers. Low interest rates have accelerated growth in consumer demand and the home property market, which remains at a healthy growth rate of over 10%. Meanwhile, activity in the services sector has been gathering pace.
Australia is proving consistently effective at attracting investment in the fast growing agri-tech market. Investments in Australian businesses based on producing environmentally safe products to help the global demand for food are growing. January 2016 has already seen US investment in Queensland based bio-pest control firm AgBitech, while partnerships in renewable energy and mining have also been growing over the last 12 months.
A decline in China’s demand for Australian exports does create a major risk to future economic growth. However, positive growth in the consumer spending and services sectors provides encouragement for the medium term as Australia continues to build on the success of resources while also broadening its growth strategy.
The success of this strategy is evidenced through the scale of Australia’s commitment to developing prosperous partnerships with the developing world. Australia is one of the largest foreign investors in several African countries. Government trade organisation Austrade estimates more than 150 ASX-listed companies are involved in 500 projects across 38 African countries. This represents the largest number of Australian resource projects in any region outside Australia.
Across Asia, partnerships and integrated working practices such as the ASEAN Economic Community are helping drive growth supported by trade agreements such as the Trans-Pacific Partnership. Growth in corporate activity has seen dramatic change in the region since the turn of the millennium. In the list of Fortune 500 companies there are now 190 Asian businesses which is almost double the representation of 16 years ago.
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