Some say tourism is synonymous with Australian business, since the tourism, service and financial sectors account for 69% of the country’s GDP. The good news about Australian capital is that it’s been continually growing over the past 15 years, with low unemployment, low inflation and a strong mining industry.
Drought has been a wrench thrown in Australian agriculture this year, although the streak of bad luck is forecasted to improve. Australians live in a very global economy, having become powerful players in the Asian markets, especially since many of the immigrants in Oz are from Japan, the Philippines, mainland China and South Korea.
Globalization is a big part of business in all industrialized countries, but more so with regard to business in Australia. Liberal immigration policies following the world wars has added thousands of citizens from Japan, mainland China, Vietnam, Fiji, South Korea and the Philippines to its shores. For this reason, there is a good working relationship with these other nations and the Chinese industrial world has a growing demand for Australian minerals and fuels.
The rise of China’s middle class added another agricultural market to Australia’s list, which previously exported mainly to Japan. It is estimated that one out of two of Australia’s export dollars are now earned in Easy Asia (3/4 in the Asia-Pacific realm, in total). Half of Australia’s foreign direct investment occurs in Asian countries too.
Another characteristic of Australian business is that there is a strong financial center. Following a merger in 2006, the Australian Stock Exchange and the Sydney Futures Exchange became the 8th largest exchange in the world.
That year, the Australian Stock Exchange saw a total market capitalization of $1.4 trillion, with 148,000 equities and 400,000 futures-and-options contracts traded each day. The financial sector, which has been growing steadily at 5% each year, employs over 380,000 Australians.
The term “lucky country” is often used to describe the land down under. Australians proudly use this term in reference to their abundance of riches, their geographic isolation and their pleasant climate. However, social critic Donald Horne used the phrase a different way, saying that Australia was lucky that the economy hadn’t collapsed from its business climate being seized by trade barriers and tariffs, overprotective labor unions and low natural resource wealth.
The criticism of Australian business is that export-oriented manufacturing is low and their prosperity largely depends upon foreign investments, which could be troublesome in the event of industry instability overseas.