The Growth of the Asian Economy

By 2016, Australia assess that mining had raised genuine per capital household extra income by 13%, raised genuine wages by 6% and brought down the unemployment rate by around 1¼ rate focuses. There have additionally been cost. The mining has prompted a huge valuation for the Australian dollar that has weighed on different enterprises presented to exchange, for example, assembling and farming.

Achieving external stability is an important objective of economic policy, achieving this stability ensures that imbalances in Australia’s economic relationships with other economies do not hinder achieving domestic economic policy goals such as lower rate of unemployment, higher rate of growth and lower inflation. There are three main factors that effect external stability the deficit on the current account (CAD), net foreign liabilities and the Australian dollar. Australia’s experienced times when overseas investors decided that the economy’s external position was unstable, and when investors like such decide to withdraw their

Australia has also experienced a rising terms of trade to 130.0 in late 2011 due to the commodities boom as a result of the industrialization of the BRICs, whereby Australia has experienced high export and national income, but has resulted in less competitiveness in other sectors due to the high AUD, causing the ‘Dutch disease’ whereby non-commodity sectors lose competitiveness. Similarly is can be seen in its narrow export base whereby in 2012-13 one third of export revenue came from coal and iron ore ($96 billion from 300 billion), furthermore 57% of Australian export revenue is made up of mineral and energy exports, whereby Australian growth has been largely fuelled by commodity exports and mining boom.

The impact of globalisation has also changed the structure of Australia 's trade. There has been considerable growth in manufacturing and service industries with limited growth in the rural sector (Table 2). This reflects a combination of changes in world demand and domestic structural reforms.

The world price of Australia’s mining exports has more than tripled over the past decade, while investment spending by the mining sector increased from 2 per cent of GDP to 8 per cent. This ‘mining boom’ represents one of the largest shocks to hit the Australian economy in generations. This paper attempts to quantify some of its effects, using top-down analysis of the Australian economy. It will show the mining boom has substantially increased Australian living standards. By 2016, we estimate that it had raised real per capita household disposable income by 13 per cent, raised real wages by 6 per cent and lowered the unemployment rate by about 1¼ percentage points. There have also been costs. The boom has led to a large appreciation of the Australian dollar that has weighed on other industries exposed to trade, such as manufacturing and agriculture.

With a GDP of over $1 trillion USD, the Australian economy is among the largest in the world (Cornett and Saunders, 2014). Australia is trading partners with the United States, China, and Japan, but their economic ties are mainly centered in the Pacific Rim. Exports are crucial to the country’s GDP and this has created problems regarding sustainability in the Australian economy.

The structure of Australian economy has continuously evolved over the last century and it continues to do so. In last century, there was a shift in the economy from manufacturing and mining sector to service sector. Firms in Australia have continuously innovated along with the boom in Information technology and have grown bigger in this digital era. Now, with increasing world demand for commodities especially from India and China, the stage has been set for Mining sector to rebound.

Thanks in part to microeconomic reforms in the 1980s, Australia has experienced two decades of continuous growth, low unemployment, controlled inflation, very low public debt, and a strong and stable financial system (Washington, DC: Central Intelligence Agency, 2013-2014). Australia has an efficient government sector, a flexible labor market, and a very competitive business sector (About Australia Pty Ltd, 2015). The four main components that make up the Australian market economy are trade, manufacturing, services, and finance. The services sector represents the largest part of the Australian economy, accounting for 75% of all jobs and nearly 70% of the overall GDP (Washington, DC: Central Intelligence Agency,

Asian cities have been tended to grow more quickly than Western cities, so what makes their growth so phenomenal? The accelerated rate may be attributed to population dynamics, economic markets and or/socio-political conditions, poor planning and disregarding environmental hazards like flood plains have held them back. Many primate cities in Asia have grown to become megacities, and some more are rapidly increasing in size to assume such a status by the end of the century. This is a remarkable phenomenon fraught with various implications, favorable or unfavorable. In 1960 there were only two megacities in the region, which were, Tokyo and Shanghai. In 1970 Beijing was added, and Asia had three of 10 megacities in the world, or two of five

There have been substantial amounts of international trade between Australia and China, with a large and robust demand of Australian energy and minerals from China. The more prominent effect of China’s demand is on Australia’s level of exports. Exports increased substantially as exports to China accounted for 21.6% of Australia’s total exports during the GFC period (Priestley, 2010). In order to satisfy these high demands, Australia must increase its supply of these resources which results in the increase in investment of mines and energy production plants. Profits of firms who supply these resources would also increase. Favourable profits would raise worker’s income which would lead to increased consumption (assumed to be autonomous

Mining has been a driving force for much of the exploration of Australia's remote inland and for Australia's industrial development, from the gold rushes of the 19th Century, through the iron ore and nickel booms of the 1960s, through the later growth of the coal industry, and to the current booming demand for minerals to fuel the industrial growth of much of the rest of the world. Australia has benefited greatly from the current resources boom, reflected in high rates of economic growth, record low levels of unemployment and increasing incomes for Australians. However, Australia’s world economic ranking has significantly decreased from 5th in 2001-02, to 22nd in 2014-15. (See appendix 10) This drop in world economic ranking may not entirely

The main issue in the article is the decline of the Australian dollar against the US dollar. Upon perusing it is understood that the Australian dollar is steadily declining during the current year. The economists said that this is due to the fall of commodity prices globally. The Australia is agriculture and resource based economy, and the Australian dollar heavily depends on commodity price and terms of trade. According to the IMF the reason for the falling commodity prices is the slowing of demand globally. It’s mentioned that Australia, Canada and New Zealand are the three of the worst performing currencies of 2015. In order to stimulate economy the Reserve Bank of Australia is planning to cut its rate to 1.5% before March 2016 to deal with lower GDP and low domestic demand that is increasing unemployment. Mining investment has slowed down, which reduced the value of iron ore, causing Capital imports to fall in Australia. If the dollar declines too far, then Australia’s import will be reduced and this is difficult for businesses. Another nail in the coffin for the Australian economy is the plan to raise the rates of UK and US which could further decline the value of AUD.

Australia is ranked 12th largest economy in the world and is increasingly tied to fast-growing economies in Asia. It has transformed to an open, export oriented market economy with a GDP of approximately 1.5606 trillion USD since the economic reforms program introduced by the government in 1983 (Economy Watch, 2014). These reforms include reducing tariffs and nontariff barriers, floating the Australian dollar, deregulating the financial service sector, increasing efficiency between the federal and state branches of government, and reforming the tax system (Economy Watch, 2014). Today, Australia has a very healthy economy, stable government, sound infrastructure and manufacturing, and superb communication network.

The second key national interest of Australia is the economy. Australia’s capital, jobs, standards of living, technological innovations and social advances rely substantially on exports and commodity values within Southeast Asia and the Pacific (Department of Foreign Affairs and Trade 2016a). The stability of South East Asia and the Oceania

The Australian economy in the course of recent years has demonstrated a more prominent level of adaptability than was the situation in the 1970s and 1980s. This has made it stronger to the different outside stuns that have been experienced over the period: the Asian emergency; the breakdown of the website bubble; and the late crumple of the US sub-prime credit rise, to name a portion of the more serious.