Australia-ASEAN Business relations August 2016 Mark Thirlwell, Chief Economist
WHY ASEAN AND WHY NOW? SIX DRIVERS AND SIX OPPORTUNITIES
WHY ASEAN AND WHY NOW? A KEY RESOURCE PRODUCED BY AUSTRADE AND DFAT Australia-ASEAN Business relations 3
WHY ASEAN AND WHY NOW? SIX REASONS FOR OPTIMISM 1. An expanding and deepening regional economic architecture, including the establishment of the ASEAN Economic Community (AEC). 2. The growth of the services sector and its potential as a major regional growth driver. 3. The development of regional and global value chains. ASEAN’s growing status as an FDI magnet. 4. 5. Infrastructure development and enhanced connectivity. 6. Productivity gains via education and training. Australia-ASEAN Business relations 4
WHY ASEAN AND WHY NOW? OPPORTUNITIES FOR AUSTRALIAN BUSINESS 1. Services into infrastructure development, including sustainable urbanisation and transport. 2. Education and skills training into human capital development. 3. Sustainable food partnerships, reliable supply and support for self sufficiency challenges. 4. Plug into regional value chains: aviation, automotive, gas, logistics. Wealth management into ASEAN’s growing pool of savings. 5. 6. Two-way tourism development and promotion. Australia-ASEAN Business relations 5
A LOOK AT THE CURRENT STATE OF PLAY EXPORTS, EXPORTERS AND INVESTMENT
ASEAN IS ALREADY A KEY TRADING PARTNER A MAJOR EXPORT MARKET AND A KEY SOURCE OF IMPORTS Top ten import sources for goods and services 2015 Top ten export markets for goods and services 2015 A$ bn Share (%) A$ bn Share (%) 1 China 91.3 28.8 1 China 64.2 18.2 2 Japan 42.4 13.4 2 United States 48.1 13.6 3 United States 22.1 7.0 3 Japan 22.7 6.4 4 Republic of Korea 20.0 6.3 4 Republic of Korea 15.8 4.5 5 India 13.6 4.3 5 Thailand 15.4 4.4 6 New Zealand 12.6 4.0 6 Germany 15.4 4.4 7 Singapore 11.0 3.5 7 Singapore 14.7 4.2 8 United Kingdom 8.8 2.8 8 United Kingdom 14.4 4.1 9 Malaysia 8.0 2.5 9 New Zealand 11.4 3.2 10 Taiwan 7.5 2.4 10 Malaysia 11.2 3.2 Subtotal 239.1 75.0 Subtotal 233.5 66.2 Total all countries 316.6 100.0 Total all countries 352.7 100.0 ASEAN 10 57.4 16.3 ASEAN 10 38.6 12.2 EU 23.5 7.4 EU 65.9 18.7 Australia-ASEAN Business relations 7
TRENDS IN GOODS AND SERVICES EXPORTS EXPORTS OVER TIME TOP TEN EXPORTS Exports to ASEAN A$ billions per cent Value (LHS) 45 14 Top ten exports to ASEAN, 2015 Share of total exports (RHS) A$ bn Share (%) Change (%) 40 13 Education-related travel 3.9 10.0 5.4 Gold 2.8 7.2 -26.7 35 12 Wheat 2.7 6.9 5.5 Other business services 2.4 6.2 19.4 30 11 Crude petroleum 2.0 5.3 -44.9 25 10 Personal travel ex ed. 1.7 4.4 2.2 Coal 1.3 3.4 27.3 20 9 Live animals 1.0 2.7 21.9 Copper 1.0 2.5 -22.3 15 8 Aluminium 0.9 2.4 -6.6 10 7 Total exports 38.6 100.0 -3.9 5 6 2001 2003 2005 2007 2009 2011 2013 2015 Source: ABS. Australia-ASEAN Business relations 8
TRENDS IN GOODS AND SERVICES IMPORTS IMPORTS OVER TIME TOP TEN IMPORTS Imports from ASEAN per cent A$ billions 65 20 Top ten imports from ASEAN, 2015 A$ bn Share (%) Change (%) Refined petroleum 6.1 10.6 -35.4 55 19 Personal travel ex ed. 5.3 9.2 -0.2 Crude petroleum 5.1 8.8 -46.7 45 18 Goods vehicles 3.9 6.7 32.8 Transport services 3.4 5.9 -5.6 35 17 Passenger motor vehicles 2.0 3.5 24.7 Telecom equipment 1.9 3.3 30.6 Other business services 1.7 2.9 23.6 25 16 Value (LHS) Computers 1.5 2.6 38.3 Heating & cooling equip. 1.3 2.2 -15.9 15 15 Share of total imports (RHS) Total imports 57.4 100.0 -5.6 5 14 2001 2003 2005 2007 2009 2011 2013 2015 Source: ABS. Australia-ASEAN Business relations 9
AUSTRALIAN MERCHANDISE EXPORTS TO ASEAN DEVELOPMENTS IN 2015 BY MAJOR GOODS CATEGORY. . . Australia's merchandise exports to ASEAN, 2015 Growth in value of exports, per cent 100 Confidential items 80 60 40 Other elaborately transformed manufactures 20 Food & live animals Chemicals Engineering products 0 Processed food Mineral manufactures and metals -20 Non-monetary gold Unprocessed fuels -40 Processed fuels -60 Mineral manufactures and metals -80 Processed minerals -100 0 5 10 15 20 Share of sector in total exports, per cent Source: DFAT and Austrade Australia-ASEAN Business relations 10
AUSTRALIAN MERCHANDISE EXPORTS TO ASEAN EXPORTS TO ASEAN BY SELECT ASEAN MEMBER Merchandise exports to ASEAN to June 2016 Merchandise exports to selected ASEAN members Viet Nam Rolling annual total, A$ billions Rolling annual total, A$ billions Singapore 30 10 Indonesia Malaysia 25 8 Thailand 20 6 15 4 10 2 5 0 0 Source: ABS. Source: ABS. Australia-ASEAN Business relations 11
AUSTRALIAN MERCHANDISE EXPORTERS A MIXED PICTURE ON EXPORTER NUMBERS. . . Top 15 export markets for goods in 2014-15: By number of exporters Change in Share of total exporters (per number of Number of exporters cent) exporters Market 1 New Zealand 18,054 37.1 904 2 United States 10,232 21.0 841 3 Singapore 6,418 13.2 228 4 Hong Kong SAR 6,345 13.0 1008 5 China 6,231 12.8 338 6 United Kingdom 5,722 11.8 518 7 PNG 4,824 9.9 26 8 Malaysia 3,831 7.9 -8 9 Japan 3,105 6.4 74 10 Fiji 2,961 6.1 97 11 Thailand 2,953 6.1 111 12 Germany 2,852 5.9 97 13 UAE 2,756 5.7 320 14 Canada 2,469 5.1 142 15 Indonesia 2,428 5.0 -33 Source: ABS 5368.0.55.006, Table 9. Note, exporters can sell to more than one market. Memo: Vietnam 1,938 exporters, up 196 Philippines 1,860 exporters, up 73 Australia-ASEAN Business relations 12
AUSTRALIAN SERVICES EXPORTS TO ASEAN BY COUNTRY BY SERVICE Service exports to ASEAN Service exports to ASEAN A$ billions Singapore A$ billions Per cent Travel services Malaysia 12 18.0 12 Other business services Indonesia Viet Nam Transport services 10 17.0 10 Thailand Other services Other ASEAN 8 16.0 8 Share of total (RHS) 6 15.0 6 4 14.0 4 2 13.0 2 0 12.0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: ABS. Source: ABS . Australia-ASEAN Business relations 13
AUSTRALIA AS AN INVESTOR IN ASEAN TOTAL FOREIGN INVESTMENT FDI Top ten destinations for foreign investment, 2015 Top ten destinations for FDI, 2015 A$ bn Share (%) A$ bn Share (%) 1 United States 594.4 28.6 1 United States 105.2 19.4 2 United Kingdom 353.2 17.0 2 United Kingdom 81.3 15.0 3 New Zealand 98.7 4.7 3 New Zealand 60.5 11.2 4 Japan 93.2 4.5 4 Singapore 21.2 3.9 5 China 70.2 3.4 5= Papua New Guinea np np 6 Singapore 67.1 3.2 5= Germany np np 7 Germany 66.9 3.2 5= China 14.1 2.6 8 Hong Kong (SAR) 50.7 2.4 8 Canada 8.5 1.6 9 Cayman Islands 49.5 2.4 9 Bermuda 7.9 1.5 10 France 45.6 2.2 10 Netherlands 7.8 1.4 Subtotal 1489.5 71.6 Subtotal - - Total all countries 2080.7 100.0 Total all countries 542.6 100.0 ASEAN 10 100.7 4.8 ASEAN 10 37.6 6.9 EU 589.5 28.3 EU 111.8 20.6 Australia-ASEAN Business relations 14
AUSTRALIAN FDI INTO ASEAN A GROWING SHARE, WITH SINGAPORE STILL FAVOURITE. . . Stock of Australian FDI in ASEAN A$ billions Per cent Singapore (LHS) 40 8 Other ASEAN (LHS) 35 7 30 ASEAN share of total (RHS) 6 25 5 20 4 15 3 10 2 5 1 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: ABS. Australia-ASEAN Business relations 15
ASEAN AS AN INVESTOR IN AUSTRALIA TOTAL FOREIGN INVESTMENT FDI Top ten sources of foreign investment, 2015 Top ten sources of FDI, 2015 A$ bn Share (%) A$ bn Share (%) 1 United States 860.3 28.4 1 United States 173.5 23.6 2 United Kingdom 499.9 16.5 2 Japan 85.9 11.7 3 Belgium 238.5 7.9 3 United Kingdom 76.0 10.3 4 Japan 199.6 6.6 4 Netherlands 44.4 6.0 5 Singapore 98.6 3.3 5 China 35.2 4.8 6 Hong Kong (SAR) 85.4 2.8 6 Singapore 28.8 3.9 7 China 74.9 2.5 7 Canada 25.9 3.5 8 Netherlands 63.0 2.1 8 Bermuda 24.1 3.3 9 Luxembourg 58.3 1.9 9 British Virgin Islands 21.5 2.9 10 Switzerland 50.2 1.7 10 Germany 17.2 2.3 Subtotal 2228.7 73.7 Subtotal 532.6 72.4 Total all countries 3024.0 100.0 Total all countries 735.5 100.0 ASEAN 10 126.7 4.2 ASEAN 10 41.5 5.6 EU 990.9 32.8 EU 157.6 21.4 Australia-ASEAN Business relations 16
ASEAN FDI INTO AUSTRALIA SINGAPORE STILL OUR MAIN ASEAN INVESTOR. . . Stock of ASEAN FDI in Australia A$ billions Per cent Singapore (LHS) 50 7 Other ASEAN (LHS) 40 6 ASEAN share of total (RHS) 30 5 20 4 10 3 0 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: ABS. Australia-ASEAN Business relations 17
WHAT DO AUSTRALIAN BUSINESSES TELL US? FINDINGS FROM AIBS 2016
NEW SURVEY RESULTS FROM AIBS 2016 AUSTRALIA’S INTERNATIONAL BUSINESS SURVEY 2016 Australia-ASEAN Business relations 19
AIBS 2016 TOP TARGET MARKETS FOR NEXT TWO YEARS TWO ASEAN MARKETS IN THE TOP TEN. . . Australia-ASEAN Business relations 20
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