Provides Australia's first comprehensive view of how the most difficult year of recent times - in economic terms at least - has impacted on Australia-Asia engagement.
The PwC Melbourne Institute Asialink Index is the first multi-indicator measure of engagement between Asia and Australia. The Index measures engagement between Australia and Asia over the period 1990-2009, analysing both the level and rate of change across seven components and 25 economies.
Tracking 2009 along seven critical indicators - trade, investment, research and business development, education, tourism, migration and humanitarian assistance - the Index reveals that recent growth in our engagement was substantially curtailed, and there were falls in three components.
Under pressure of the global financial crisis, the flattening was driven by trade - specifically a decline in imports - and overall investment flows between Australia and Asia. A slowdown in the rapid growth of recent years in the education and migration components was also a contributor.
Highlights include:
• China became our largest trading partner and largest investor (and also overtook Japan as the world’s second largest economy). Exports to China increased by 39 per cent in real terms, a record rise.
• Australia’s trade surplus with Asia grew at a faster rate than ever before - with imports from Asia falling by 12.9 per cent while exports continued to rise.
• Tourism engagement continued to increase over 2009. On current trends, China will be larger than Japan as our biggest source of incoming tourists within a year.
• Australian outbound investment to Asia declined. Australians investing abroad clearly prefer the United States, New Zealand and the European Union over Asian economies. At the same time, foreign direct investment (FDI) from Asia into Australia increased substantially, despite a 43 per cent worldwide decline.
• While the China and India relationships remained extremely robust in the period, Australian engagement declined for each of the other major economies under scrutiny.
• Data on education engagement shows a concerning slowdown of international arrivals for study in Australia, and further deceleration anticipated. At the same time, Australians appear to be less and less interested in studying in Asia, a particularly disturbing trend.
