Editing Economy of Australia (section)

==Trade and economic performance{{anchor|Trade}}==
{{See also|List of the largest trading partners of Australia|List of exports of Australia|Free trade agreements of Australia}}
[[File:Map of countries with which Australia has free trade agreements.svg|thumb|{{Legend|#ff0000|Australia}}{{Legend|#00bf00ff|Free trade agreements in force}}|400x400px]]

In the second half of the 20th century, Australian trade shifted away from Europe and North America to Japan and other East Asian markets. Regional franchising businesses, now a $128&nbsp;billion sector, have been operating [[co-branding|co-branded sites]] overseas for years with new investors coming from Western Australia and Queensland.<ref>{{cite news|last=Blackie|first=Tony|title=Battle of the Brfukuands|work=[[Business Review Weekly]]|volume=30|issue=27|date=10 July 2008|pages=32–35}}</ref>

In the late 19th century, Australia's economic strength relative to the rest of the world was reflected in its GDP. In 1870, Australia had the highest GDP per capita in the world due to economic growth fuelled by its natural resources. However, as Australia's population grew rapidly over the 20th century, its GDP per capita dropped relative to countries such as the US and [[Norway]]. However, the Australian economy has been performing nominally better than other economies of the OECD and has supported economic growth for over 20 consecutive years.<ref>[http://www.economist.com/finance/displaystory.cfm?story_id=8931798 ''"Downwonder: The "lucky country" may not be so for too much longer"''] @ The Economist – 29 March 2007.</ref> According to the [[Reserve Bank of Australia]], Australian per capita GDP growth is higher than that of New Zealand, US, Canada and The Netherlands.<ref>[http://www.rba.gov.au/speeches/2007/sp-ag-160307.html ''"Australia in the Global Economy"''] by Malcolm Edey the Assistant Governor (Economic) – Address to the Australia & Japan Economic Outlook Conference 2007 – Sydney – 16 March 2007.</ref> The past performance of the Australian economy has been heavily influenced by US, Japanese and Chinese economic growth.

===Australian national debt===
[[File:Australia bonds.webp|thumb|Australia bonds
{{legend-line|#012169 solid 3px|30 year}}
{{legend-line|#61D836 solid 3px|20 year}}
{{legend-line|#929292 solid 3px|10 year}}
{{legend-line|#F8BA00 solid 3px|5 year}}
{{legend-line|#FF2600 solid 3px|2 year}}
{{legend-line|#73FDEA solid 3px|1 year}}
]]
{{Further|Australian government debt}}
Australia's net external debt exceeded $1&nbsp;trillion in April 2017 as a result of Australia's structural [[Current account (balance of payments)|current account]] deficits.<ref name="AusDebt">{{cite web|url=https://www.smh.com.au/business/the-economy/australias-1-trillion-foreign-debt-level-should-worry-us-all-20170407-gvfsqq.html|title=Australia has $1&nbsp;trillion foreign debt. Should we be worried?|work=The Sydney Morning Herald|date=8 April 2017|access-date=8 August 2017}}</ref> Although these deficits have narrowed over the last decade due to an increase in net merchandise trade, this effect has been partly offset by the return of Australian government debt; net federal debt was estimated at $326.0&nbsp;billion in the 2016–17 [[Australian federal budget|federal budget]]<ref>{{cite web|url=http://www.budget.gov.au/2016-17/content/bp1/html/bp1_bs6-01.htm|title=Budget Paper No.1 2016–17|publisher=budget.gov.au|access-date=8 August 2017|archive-url=https://web.archive.org/web/20171213132022/http://www.budget.gov.au/2016-17/content/bp1/html/bp1_bs6-01.htm|archive-date=13 December 2017|url-status=dead}}</ref> of which 60% is owed to foreigners.<ref name="AusDebt"/> The entirety of the debt has been accumulated through ten straight budget deficits as Australia had negative net government debt (i.e. The Australian government had net positive bond holdings) a decade earlier in the 2006–07 fiscal year.<ref>{{cite web|url=http://www.budget.gov.au/2006-07/overview/html/overview_06.htm|title=Australian Government is now debt free|access-date=8 August 2017|archive-url=https://web.archive.org/web/20171004015341/http://www.budget.gov.au/2006-07/overview/html/overview_06.htm|archive-date=4 October 2017|url-status=dead}}</ref>

===Chinese investment===
There is substantial export to China of iron ore, wool and other raw materials, and over 120,000 Chinese students study in Australian schools and universities. China is the largest purchaser of Australian debt.<ref name="NY Times">[https://www.nytimes.com/2009/06/03/world/asia/03australia.html "Australia Feels Chill as China's Shadow Grows"] article by Michael Wines in ''[[The New York Times]]'' 2 June 2009.</ref> In 2009, offers were made by state-owned Chinese companies to invest $22&nbsp;billion in Australia's resource extraction industry.<ref name="NY Times" />

The Signing of the China-Australia Free-Trade Agreement, signed November 2014, has the potential to drastically increase Chinese Investments as agriculture and services become more lenient.

Australia's special investor [[Visa policy of Australia|visa program]] introduced in 2012 encouraged Chinese investment. The visa program fast-tracks visas and eases the residency requirement for a permanent visa for those ready to invest over five million Australian dollars into state government bonds, specific infrastructure and property investments. Wealthy Chinese interested in direct investment began looking to Australia after Canada started scaling back its investment visa program in 2012 and eliminated its main investor visa program in 2014. In early 2014 it was reported that the Australia's special investor visa was granted to 65 mostly Chinese millionaires who brought over $440&nbsp;million into the country. By 2017, almost 90% of the more than 1,300 foreigners who used Australia's special investor visa program were from China.<ref name="sbs2014-ChineseWealth" /><ref name="nyt2017-globalMillionaires" /> Australia also has an investor visa program with a required investment of one million Australian dollars but with more restrictions and a lengthier period of time to get a permanent visa.<ref name="nyt2017-globalMillionaires" />

In 2017, it was reported that Australia is the third-most popular destination for Chinese to invest wealth offshore, with a 7% increase in Chinese private wealth flowing into Australia while interest in the top two investment destinations, Hong Kong and the United States, fell by 18% and 3%, respectively. In 2017 there were 1.6&nbsp;million high-net-worth Chinese (with at least 10&nbsp;million Chinese [[Yuan (currency)|yuan]] to invest) and 24 per cent of the 3,000 wealthy Chinese surveyed had private investments in Australia. Migration was one of the top three reasons for Chinese investment offshore.<ref name="smh2017-ChinaAus">{{cite web|last=Needham|first=Kirsty|title=China's richest have $30&nbsp;trillion to spend, and more investing in Australia|url=https://www.smh.com.au/business/world-business/chinas-richest-have-165-trillion-to-spend-and-more-investing-in-australia-20170620-gwuvh0.html|website=[[The Sydney Morning Herald]]|access-date=9 August 2017|date=20 June 2017}}</ref>

In 2018, in the [[Lowy Institute]] poll there had a sharp rise in the proportion of the Australian population who say the Australian government is "allowing too much investment from China".{{citation needed|date=February 2021}}

This number rose from 56 per cent in 2014 to 72 per cent in 2018.<ref>{{Cite web|url=https://www.sbs.com.au/news/australians-are-losing-trust-in-the-us-a-new-poll-shows|title=Australians are losing trust in the US, a new poll shows|work=SBS News}}</ref>

===Australia's balance of payments===
[[File:ABS-5302.0-BalancePaymentsInternationalInvestmentPositionAustralia-BalancePaymentsSummary-Original Quarter-CurrentAccount-A3533808F.svg|thumb|250px|Australia's current account (in $M) since 1959]]
[[File:ABS-5302.0-BalancePaymentsInternationalInvestmentPositionAustralia-SelectedInternationalAccountsRatios-SeasonallyAdjusted Quarter-CurrentAccountRatiosGdp-A3572038X.svg|thumb|250px|Australia's current account as a proportion of GDP since 1959]]

{{Main|Balance of payments of Australia}}

In trade terms, the Australian economy has had persistently large current account deficits (CADs) for more than 50 years.<ref name="downwonder">{{cite news|url=http://www.economist.com/node/8931798?story_id=8931798|title=The Australian economy: Downwonder The "lucky country" may not be so for too much longer|newspaper=The Economist|date=29 March 2007|access-date=11 June 2011}}</ref><ref>[http://www.exonimmigration.com/future-of-australian-economy/ ''"Future of Australian Economy"''] by Exon</ref> One of the factors that undermines [[balance of payments]] is Australia's export base, making it highly vulnerable to the volatility in the prices of commodity goods. In addition, due to a [[History of Australia|colonial heritage]] a lot of companies operating in Australia are foreign-owned and, as a result, Australia's net income outlay between it and the rest of the world is always negative; this results in persistent current account deficits even when there is a positive export.

Dependent upon commodities, the Australian government endeavoured to redevelop the Australian manufacturing sector. This initiative, also known as microeconomic reform, helped Australian manufacturing to grow from 10.1% in 1983–1984 to 17.8% in 2003–2004.<ref>Leading Edge, R: "Australia in the Global Economy", ''Tim Dixon and John O'Mahomy'', page 133.</ref>

There are other factors that have contributed to the extremely high current account deficit in Australia such as lack of international competitiveness.<ref>{{cite web|url=http://www.iadb.org/regions/re1/econ/caballero_cowan_kearns.pdf|title=Fear of Sudden Stops: Lessons from Australia and Chile|publisher=iadb.org|access-date=28 May 2012|archive-url=https://web.archive.org/web/20130518225438/http://www.iadb.org/regions/re1/econ/caballero_cowan_kearns.pdf|archive-date=18 May 2013|url-status=dead}}</ref>

However, as Australia's CAD is almost entirely generated by the private sector, as outlined in Professor John Pitchford's 'Consenting Adults Thesis' in the early 1990s, there is an argument that the CAD is not a significant issue. Historically, Australia has relied on overseas capital to fill the gap between domestic savings and investment, and many of these investment opportunities could not have been pursued if Australia did not have access to foreign savings. This suggests that Australia's apparently low savings level and CAD are not necessarily a significant problem. As long as the investment that is being funded by overseas capital inflow generates sufficient returns to pay for the servicing costs in the future, the increase in foreign liabilities can be viewed as sustainable in the longer term.<ref>Tim Dixon & James O'Mahoney, Australia in the Global Economy 2010, Leading Edge Education, Pearson Australia</ref>

===Personal wealth===
[[File:Australia's GNI per capita in 2015.png|thumb|GNI per capita in 2015]]
According to the 2011 [[Credit Suisse]] Global Wealth report, Australia's wealth per adult had quadrupled over the past decade, and its total wealth was US$6.4&nbsp;trillion. In the report Australia was the second-wealthiest country in the world behind Switzerland based on average wealth per adult, and had the highest median wealth in the world (US$222,000, nearly four times the amount of each US adult) and a proportion of people with wealth above US$100,000 that was eight times the world average. This was attributed to a resilient Australian dollar, property ownership levels and a strong labour market. Compared to the rest of the world, very few Australians had a [[net worth]] of less than US$1,000, which was attributed to relatively low credit card and [[Student loan#Australia|student loan]] debt.<ref name="ninemsn-2011wealth">{{cite web|url=http://finance.ninemsn.com.au/newsbusiness/8362821/australia-wealthiest-nation-in-world-report|title=Australia wealthiest nation in world, according to a new report|website=9 Finance|publisher=[[Nine.com.au]]|date=20 October 2011|access-date=24 July 2012|url-status=dead|archive-url=https://web.archive.org/web/20120721013637/http://finance.ninemsn.com.au/newsbusiness/8362821/australia-wealthiest-nation-in-world-report|archive-date=21 July 2012}}</ref> In 2013, Australia was identified by the Credit Suisse as retaining its 2012 position as the nation with the second-highest average wealth per adult (US$403,000);<ref name="CreditSuisse2013">{{cite web|title=Global Wealth Reaches New All-Time High|url=http://www.thefinancialist.com/global-wealth-reaches-new-all-time-high/|work=The Financialist|publisher=[[Credit Suisse]]|access-date=10 October 2013|date=9 October 2013|archive-url=https://web.archive.org/web/20160729234134/https://www.thefinancialist.com/global-wealth-reaches-new-all-time-high/|archive-date=2016-07-29}}</ref> however, the nation's poverty rate was also reported to have increased from 10.2% in 2000–01 to 11.8% at the time of the 2013 report on global wealth.<ref name="aap-Oct2013">{{cite news|title=Richest nation but poverty increasing|url=http://www.theaustralian.com.au/news/latest-news/richest-nation-but-poverty-increasing/story-fn3dxiwe-1226738699752?from=public_rss&net_sub_uid=44933799|access-date=12 October 2013|newspaper=[[The Australian]]|date=12 October 2013|agency=[[Australian Associated Press]]}}</ref>

Despite the [[Great Recession|economic slowdown]], in the 2014 Credit Suisse Global Wealth Report, Australia continued to have the second-highest average wealth per adult (US$430,800) and the highest median wealth (US$225,400), with a total wealth of $7.2&nbsp;trillion. The average level of [[Asset#Tangible assets|real assets]] (US$319,700) was the second-highest in the world after Norway and 60% of gross household assets. The report explained that this partly reflects a large endowment of land and natural resources relative to population, and also high [[Urban area#Australia|urban]] real estate prices. Only 6% of Australians had a net worth below US$10,000, compared to 29% in the US and 70% for the world as a whole. The average debt was 20% of gross assets. The proportion of people with wealth above US$100,000 was the highest in the world (eight times the world average). Australia had 3.8% (1,783,000 people) of the top 1% of global wealth holders while having 0.4% of the world's adult population.<ref name="crSuisse-2014p57">{{cite web|author=Credit Suisse|author-link=Credit Suisse|title=Global Wealth Report 2014|url=http://economics.uwo.ca/people/davies_docs/credit-suisse-global-wealth-report-2014.pdf|publisher=[[University of Western Ontario]]|access-date=6 September 2017|page=57|date=1 October 2014}}</ref> The wealth share by Australia's top [[decile]] was 51.1% in 2000, 50.7% in 2007, and 51.1% in 2014.<ref name="crSuisse-2014p33">{{cite web|author=Credit Suisse|author-link=Credit Suisse|title=Global Wealth Report 2014|url=http://economics.uwo.ca/people/davies_docs/credit-suisse-global-wealth-report-2014.pdf|publisher=[[University of Western Ontario]]|access-date=6 September 2017|page=33|date=1 October 2014}}</ref> In 2016, Australia continued to be the second-wealthiest nation in terms of wealth per adult.<ref name="dfat-top20" />

In 2017, Australia was the world's top destination for millionaires, beating the United States for the second consecutive year. An estimated 11,000 millionaires moved to Australia in 2016, compared with the 10,000 who moved to the United States. Australia was especially attractive to Chinese millionaires due to its relative proximity, cleaner environment, political and economic stability, and [[#Chinese investment|investor visa programs]]. Also, the primary reason for millionaires leaving China is top schools abroad that will give their children a better education and career connections.<ref name="sbs2014-ChineseWealth">{{cite web|title=What you need to know about new Chinese wealth flowing into Australia|url=http://www.sbs.com.au/news/article/2014/02/18/what-you-need-know-about-new-chinese-wealth-flowing-australia|website=[[Special Broadcasting Service]]|access-date=9 August 2017|date=18 February 2014}}</ref><ref name="nyt2017-globalMillionaires">{{cite web|last=Frank|first=Robert|title=For Millionaire Immigrants, a Global Welcome Mat|url=https://www.nytimes.com/2017/02/25/your-money/wealth-immigration-millionaires-australia-canada.html|website=The New York Times|access-date=9 August 2017|date=25 February 2017}}</ref>

=== Mergers and acquisitions ===
All in all over 43,150 deals have been completed national, inbound or outbound Australia. This cumulates to an overall value of US$2,554&nbsp;billion. There was a strong upward trend between 1989 and 2007. In this peak year almost 3,100 deals took place, which is almost 60% more than in 2017, the current low. Australian companies are particularly investing in the fields of metals and minerals (15% of all deals from Australia into foreign countries). Runner-up is the oil and gas industry with only 6.4%.<ref>{{Cite news|url=https://imaa-institute.org/m-and-a-statistics-countries/|title=M&A Statistics by Countries|work=Institute for Mergers, Acquisitions and Alliances (IMAA)|access-date=23 February 2018}}</ref>

Here is a list of the top 10 deals with participation of Australian companies as the acquirer or target company:
{| class="wikitable sortable"
!Date
!Acquirer name
!Acquirer industry
!Acquirer nation
!Target name
!Target industry
!Target country
!Value in US$mill
|-
|{{Date table sorting|December 2017}}
|[[Unibail-Rodamco-Westfield|Unibail-Rodamco]]
|Commercial real estate
|Europe
|[[Westfield Corporation]]
|Commercial real estate, shopping centres
|Australia
|align=right|24,800.00
|-
|{{Date table sorting|May 2008}}
|[[Westpac|Westpac Banking Corp]]
|Banking
|Australia
|[[St.George Bank|St George Bank Ltd]]
|Banking
|Australia
|align=right|17,932.98
|-
|{{Date table sorting|July 2007}}
|[[Wesfarmers|Wesfarmers Ltd]]
|Food & beverage retailing
|Australia
|[[Coles Group|Coles Group Ltd]]
|Food & beverage retailing
|Australia
|align=right|15,287.79
|-
|{{Date table sorting|October 2006}}
|Kemble Water Ltd
|Other Financials
|Australia
|Thames Water PLC
|Water and waste management
|United Kingdom
|align=right|14,888.80
|-
|{{Date table sorting|October 2006}}
|Cemex SAB de CV
|Construction materials
|Mexico
|Rinker Group Ltd
|Construction materials
|Australia
|align=right|14,247.73
|-
|{{Date table sorting|October 2016}}
|Investor Group
|Other Financials
|Australia
|Ausgrid Pty Ltd
|Power
|Australia
|align=right|12,499.92
|-
|{{Date table sorting|March 2001}}
|BHP Ltd
|Metals & mining
|Australia
|Billiton PLC
|Metals & mining
|United Kingdom
|align=right|11,510.99
|-
|{{Date table sorting|June 2011}}
|SABMiller Beverage Investments
|Other Financials
|Australia
|Foster's Group Ltd
|Food and beverage
|Australia
|align=right|10,792.76
|-
|{{Date table sorting|December 1996}}
|Investors
|Other Financials
|Australia
|Telstra Corp Ltd
|Telecommunications services
|Australia
|align=right|9,976.59
|-
|{{Date table sorting|November 2010}}
|Shareholders
|Other Financials
|Australia
|Westfield Group-Assets(54)
|Non-residential
|Australia
|align=right|9,482.42
|}