Export, Import and Production
In recent years, Australia has been a net exporter of goods and net importers of services (See appendix 1). The country, rich in natural resources, is a major exporter of commodities. Iron-ore and gold account for 28% of total commodities exports (81 Billion US$ in 2013). Coal represent 18% or 38 Billion US$ and oil and gas for 9 percent. Manufactured goods constitute 33 percent of the total exports with food and metal products and machinery and equipment accounting. Agricultural products, particularly wheat and wool make up 5 percent of trade outflows
Australia is a major importer of machinery and transport equipment, computers and office machines and telecommunication. Main import partners are China (15 percent of total imports), United States (13 percent of total imports), Japan (8 percent of total imports) and Singapore (7 percent of total imports).
Trading Partners
Trade with the Asia-Pacific region has become increasingly important for Australia. Of Australia's top sixteen major trading partners (representing around 80 per cent of merchandise exports); countries from the Asia-Pacific region are the destination for around 89 per cent of this trade.
China is the most important trade partner of Australia, the country export Iron ore and gold as well as oil and many raw materials. China is also Australia’s largest source of imports. Major imports from China are mostly finished goods that include clothing, communications equipment, computers, prams, toys, games and sporting goods, furniture and televisions. The vast scale of trade with China has also seen massive investments by Chinese companies in Australia. The majority of these investments has been in the resources sector, where Chinese companies have not only invested in Australian mining companies, but have now also started to lease land from the Australian government to mine resources on their own.
Japan is Australia's second-largest export market. Two-way goods and services trade between Australia and Japan was valued at $70.8 billion. Goods exports to Japan totals $47.5 billion, representing approximately 18.0 per cent of Australia's total goods exports. Australia's major exports to Japan included Liquid Natural Gas ($14 billion), coal ($13.7 billion), and iron ore ($9.6 billion). On the other side of the trade ledger, in 2013, Japan was Australia's third-largest source of imports. Major imports from Japan included passenger vehicles ($6.7 billion), refined petroleum ($3.4 billion), goods vehicles ($1.2 billion).
Economic Activities
The Australian economy is dominated by its service sector, comprising 68% of GDP and account for about 75% of the jobs. The mining sector represents 20% of GDP mainly fueled by the high demand for raw materials by Asia. Australia's comparative advantage in the export of primary products is a reflection of the natural wealth of the Australian continent and its small domestic market. The country is a major regional financial centre and a vital component of the global financial system. Australia is an open market with minimal restrictions on imports of goods and services. The process of opening up has increased productivity, stimulated growth, and made the economy more flexible and dynamic.
Analysis of the Balance of Payment
Trade Balance Analysis
For a country in the Organisation for Economic Co-operation and Development, Australia is unusual in that its trade profile is dominated by primary goods. Resource exports, including iron ore, coal, uranium, bauxite, oil, and natural gas, have surged on the back of robust gains in global mineral prices and strong demand in emerging Asia in the past decade. East Asia—in particular China—is the largest market for Australian resource exports, while Indian demand is growing in intensity. Minerals and petroleum products account for
