Essay: Australia's Economic Relationship with the Global Economy

This essay provides a comprehensive analysis of Australia's relationship with the global economy. It begins by outlining Australia's geographical and governmental structure, then delves into its economic characteristics, including its free market economy, currency, and global economic ranking. The essay highlights Australia's emphasis on exports, its trade agreements, and its resilience during the 2008-2009 global recession. It explores Australia's trade partners, particularly China, and its contributions to the global economy through mining, education services, and food security. The essay also examines Australia's imports, including tourism, cars, and international freight, and concludes by summarizing Australia's significant impact on the global economy through its trade, investment, and educational services, and how it contributes to the global economy.

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Relationship Between Australia And The Global Economy
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Introduction
Australia is a country consisting of a mainland continent and several islands. By total
area, Australia is the 6th largest country in the world. Australia has a population of more than 25
million people, many of which live in the urban areas of Australia. Australia borders Indonesia,
New Zealand, Papua Guinea, East Timor, Vanuatu and Solomon Islands and it is surrounded by
Atlantic and Indian Ocean. (lark, Hooper, & Ferrier,1962).Its capital city is Canberra. On
leadership, Australia is ruled by Queen Elizabeth II who is represented by The Governor General
since the queen resides in England. Its government is divided into the Legislature, the Executive
and the Judiciary. Australia is a country which has close economic relationships with other
countries around the Globe. Specifically, it has been closely associated with the United States
bound together by the 1959 security treaty. It also has a desire to develop good relationships with
Asia. Economically, Australia is a wealth country with a lot of potential and economic ties across
the globe. This essay seeks to analyze the relationship between Australia and the Global
Economy.
Analysis
Australia is a developed and a wealthy country. Its economy is largely a free market
economy in which investment, production and distribution largely depend on the forces of
demand and supply. Australian dollar is the country’s currency and it has been ranked 14th
largest economy in the world. This position shows that Australia is a very large economy which
can have substantial impact on the global economy. Apart from it being ranked 14th globally,
Australia has the lowest poverty levels and the highest average wealth worldwide (Kenen, 2011).
Australia has had emphasis on exports more than manufacturing goods and this has increased its

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terms of trade. The country also has signed several trade agreements that has enabled it steer
forward its economy and strengthen their international relationships. Australia is a member of
Commonwealth and also the world trade organization. Its bilateral trade agreements include
Australia-United states free trade agreements, Australia-China free trade agreements, Closer
economic relations with New Zealand and Australia-Chile free trade agreement. Through these
agreements, Australia has been able to grow economically by having good relationships with
other nation. During the 2008-2009, Australia was the only developed country who was never hit
by the global recession which saw economies of other countries deteriorating by a great margin.
Even though Australia was not directly hit by this recession, its economy was affected in the
subsequent years because six of its major trading partners experienced recession and directly
affected Australia. (Ball, 2014).
Through its relationships with other countries, Australia has been able to export and
import goods and services successfully gradually building its economy. This relationship is
relatively good and continues to create a strong bond. In Australia, free trade is a widely
discussed topic and its leaders are always ready to sign free trade deals. Trade liberalization and
economic reforms always take center stage in policy formulation in the country (Bhagwati,
2008). Just recently, the government of Australia signed a special deal with the US on tariffs on
aluminum and steel. This will help the country’s mineral exporters a lot even though experts
warn that it will be unfavorable for the economy In the long run.
In the past, Australia had trade ties with just Britain and United states. However, with
time, the country has shifted its interest to Asia where its major trading partners are. These are
China, Japan and Korea. Australia has contributed immensely to the global economy by creating
an environment favorable for both citizens and non-citizens to invest and grow in various

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industries. With its population of around 25 million, Australia’s contribution to food security is
immense; with its agriculture feeding more than 60 million around the world. (Productivity
Commission, 2005). This is a big stride in contribution to the global economy. Alongside this,
over 51000 businesses in the country export both goods and services worldwide. Its key role in
contributing in trade forums such as World trade organization, Asia-Pacific Economic
Cooperation and G20 is also notable. Trade liberalization push in Australia ranges from
Unilateral, bilateral to multilateral. Countries that Australia has Free trade agreements make up
to 67% of the countries bilateral trades. (Williams, 2013) Trough creation of these ties, global
economy is cushioned against risks as well as boosting its growth.
Australia’s main trade partner is China. In 2017 alone, almost a quarter of two-way trade
was with china. On china’s side, Australia stands at seventh globally as an important trade
partner. As much as Australia’s trade with china is so huge, other partners form a substantive
part of their international trade. USA makes about 9.6% of all two way trade; japan makes up to
9.1%, South Korea 4.8% while UK consists of 4.3%. The rest of the world takes 49.1%. (Dyster,
& Meredith,1990). Australia is popularly known for its mineral exports to other countries.it have
a lot of resources and professional skills coupled with technological advancement. This has lead
it being a leader in the mining sector worldwide. Australia exports Bauxite, Iron Zinc ore and
Gold to countries across the world. It is also a supplier of coal and Uranium. This helps improve
the economies of countries that lack this essential minerals to run their manufacturing industries.
The rapid growing economies of Asia are mostly the target market as it has a high demand for
these raw materials. Through this, Australia is contributing in building the global Economy.
As much as the mining sector which is the leading export sector, Australia is known for
its contribution to the global economy through education service. After United Kingdom and

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United States, Australia is the 3rd most preferred destination by international students in the
world. Students often choose Australia because of its vibrant culture and a good history. (Barron,
& Arcodia, 2002). The country has been regarded as a leader in offering world-class education
for both international and local students with 7 out of the top 100 world class universities found
in the region. To gather for students who travel from across the world in terms of recognition of
the courses they take, the Australian Quality assurance Framework gives their home countries a
very easy way to have the students qualifications recognized locally through offering comparable
qualifications to be used locally(Khawaja, & Dempsey,2008). Education services for overseas
students Act of 2000 also plays a key role in ensuring that quality education is offered to
overseas students. To ensure that the country continues to be a favorite for international students,
the government has invested in them by giving out scholarships to students around the world.
Over 200 million dollars is invested annually by the Australian government to support students
from developing nations around the world. To ensure that students get extra money for upkeep
and to finance their studies, Students are allowed to work for 20 hours a week (Mazzarol, &
Soutar, 2002). .This has helped a lot in equipping necessary knowledge to students around the
world, who in turn apply that knowledge in the development of their home countries.

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2012 2013 2014 2015 2016 2017
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
International Students Enrolled in Australian
Educational Institutions: 2012 to 2017
International Students Enrolled
in Australian Educational
Institutions: 2012 to 2017
(Larkins, 2018).
Apart from Australia exporting goods and offering services, Australia also imports
various goods and services which they do need for their economic development. The leading
import sector in Australia is Tourism. Australians loves traveling a lot. They travel for various
reasons, ranging from holiday vacations to business travels. It is estimated that 31% of
Australian travel overseas with this rate ever growing. This enormous travel is contributed by its
strong dollar and the competitiveness in the air travel rate. As Australians visit various countries
in the world, they increase the revenue of those countries they are visiting through payment of
tourism fees. Alongside this, as they spend time in those countries, they spend lot of money
hence improving the economies of those countries. The most visited countries by Australians are
New Zealand, Indonesia, USA, Thailand, and the UK. (Kuttainen, 2014). Apart from travel,
Australian imports a lot of cars into its country. This contributes enormously to the global
economy given that most Australians use luxury vehicles in their travel. Besides this, phones and

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computers used in the country are also imported. Australians also use a lot of money in
international freight transport to have their imports brought into the country.
Conclusion
In conclusion, Australia is one of the developed nations in the world that have great
impact in the global economy. Australia has good relationship with many countries globally and
this has made it have a lot of economic prosperity. Through its exports, Australia has been able
to steer other nations’ economies through supply of essential raw materials to its factories. It has
also boosted global food security through exporting food across the globe. In the education
sector, it has helped developing countries by sponsoring their students through international
student’s scholarship programs hence improving the literacy levels of those countries. It has also
helped many students from Asian countries like China learn English. Its love for travel has
contributed immensely to the global economy by spending a lot on countries they travel to.
Finally, through its imports, it has increased revenue to transport service providers from other
countries.

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References
Ball, L. M. (2014). Long-term damage from the Great Recession in OECD countries (No.
w20185). National Bureau of Economic Research.
Barron, P. E., & Arcodia, C. (2002). Linking learning style preferences and ethnicity:
International students studying hospitality and tourism management in Australia. Journal
of Hospitality, Leisure, Sport and Tourism Education, 1(2), 15-27.
Bhagwati, J. (2008). Termites in the trading system: how preferential agreements undermine free
trade. Oxford University Press.
Clark, C. M. H., Hooper, M., & Ferrier, S. (1962). A history of Australia (Vol. 1, pp. 274-275).
Melbourne: Melbourne University Press.
Dyster, B., & Meredith, D. (1990). Australia in the International Economy: in the twentieth
century. CUP Archive.
Kenen, P. B. (2011). Currency internationalization: an overview. BIS Papers, 61, 9-18.
Khawaja, N. G., & Dempsey, J. (2008). A comparison of international and domestic tertiary
students in Australia. Journal of Psychologists and Counsellors in Schools, 18(1), 30-46.
Kuttainen, V. (2014). Trafficking literature: travel, modernity, and the middle ground of
Canadian and Australian middlebrow print cultures. International Journal of Canadian
Studies, (48), 85-103.
Larkins, E. F., Proffesor. (2018). International Student Enrolments in Australia by Sector in
Comparison to Higher Education. Retrieved May 23, 2019, from https://melbourne-

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cshe.unimelb.edu.au/__data/assets/pdf_file/0008/2843450/2018_F-P-
Larkins_International-Student-Enrolments-by-Sector.pdf
Mazzarol, T., & Soutar, G. N. (2002). “Push-pull” factors influencing international student
destination choice. International Journal of Educational Management, 16(2), 82-90.
Productivity Commission. (2005). Trends in Australian agriculture (No. 0502).
Williams, B. R. (2013). Trans-Pacific Partnership (TPP) countries: comparative trade and
economic analysis.

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Appendix 1: International Students Enrolment in Australia since 2012
2012 2013 2014 2015 2016 2017
513,244 524636 586817 642290 709605 799371