Tasmania’s Thriving Economy with Diverse Exports

Question:

Prepare a briefing note outlining 5 Countries that might benefit from Tasmania’s value added products. Consider only countries that have highest value Imports that are in Demand.

Most successful nations depend on their economy to maintain their status or move to a higher standard of power. Tasmania, the world’s 26^th largest island, can balance its trade activities across the globe regardless of it being an island. Goods and services from Tasmania are valued more than its imports. The major constituents of the exports are from mining, tourism and agricultural sector (Dpac.tas.gov.au, 2012). There is hope for the former Van Diemen’s Land economic plan of self-fulfilment in accordance of its officials and residents.

China, Taiwan, Malaysia, Japan and Vietnam are the primary receivers of Tasmania’s supplies. China and Japan are among the top five rank of highest global importers (Dillinger, 2017). Despite the fact that the US, Germany and the UK also lead in global imports, they are of no much importance to Tasmania’s export earnings (Michael Hennigan, 2017). Diversification and value addition in trade has enabled Tasmania to do good business with its partners (Organization for Economic Co-operation and development, 2017).

China is a more-developed country owning 14.9% of shares in the European Union goods exchange following the United States at 17.7% (Dillinger, 2017). It imports $1,960.29 billion USD (Dillinger, 2017). This trade involves more than €1 billion daily. Economic changes allowed China to be the largest in purchasing power parity with an average income per capita of 17,632 since 2014. Thus its economic expansion might be maintained between 2% and 6.5% as time goes by (Will the shift in global economic power continue? 2017). Many challenges affect china’s success in business. There might be a decrease in labour productivity. Either ratings for convergence or the average income per capita investment can reduce. The government is prone to such dangers that interfere with technology and economy. Tasmania supplies goods like aluminum (415 A$ million), zinc (571 A$ million), ores and concentrates of iron (238 A$ million) and copper (55 A$ million) to its partners. China exports other goods including 22 A$ million for vehicles, 17 A$ million for machinery and 20 A$ million for animal products to buyers including Tasmania. Such relationship has built a mutual benefit between the two countries. World Trade Organization (WTO) acknowledges the membership of China since 2001. The main problems in dealings with China include mistrust, discrimination against outside companies, insufficient funding from the government and insecurity. As a result, delays in some business activities occur in the country. On the other hand, population growth and massive firms form a basis of prosperity (Will the shift in global economic power continue? 2017). More than a billion people are living in China today. About 8,004 Chinese, 5% of the total number of tourists, travelled into Tasmania by the end of the year 2011.

Primary Global Trade Partners of Tasmania

Taiwan, a developing country, has above 60% of the average income per capita (Will the shift in global economic power continue? 2017). The GDP increased to 529 USD in 2016 (Department of Foreign Affairs and Trade, 2017). Its exports are mostly minerals to Australia while importing animal products from the same partner (Dpac.tas.gov.au, 2012). Tasmania has 9.6% of export shares in Taiwan (Department of Foreign Affairs and Trade, 2017). Tasmanian Quality Meats and Australian Honey Products received an award from Tasmanian Export Award in 2013/2015 and 2016 respectively due to this partnership. Formosa Plastics Groups is one of the essential companies contributing to Australia. About A$1.3 billion rises during this exchange (Department of Foreign Affairs and Trade, 2017). Poor infrastructure and financing are significant crises for the business. However, the government of Taiwan provides a more secure environment for trade primarily in agricultural production which is valued by the World Trade Organization at a moderate tariff of 22.1 %. With 23.5 million people (Department of Foreign Affairs and Trade, 2017), Taiwan is capable of participating in major profitable businesses (Trademinister.gov.au, 2017). Required support from the both Australian and Taiwan’s officials has allowed this partnership to last longer (Dpac.tas.gov.au, 2012). If this goes on as planned, the future is in their favour.

Among the industrialising nations, Malaysia produces more natural resources than any other material making a development rate of 5.7% (World Bank, 2017). The Malaysia-Australia Free Trade Agreement stirred up many activities since 1 January 2013. Tasmania owns 9.4 percent of the total supply shares in Malaysia worth 249 Australian dollars. Its dominance in the country (81% of exports) earned it 218 million dollars in one year from 2010. Minerals ($148 million) are at the core of this exchange. Effects from challenges like poverty are not severe in the country with not more than 1 percent most poor conditions enabling the state to trade fairly. Its administration succeeded in lessening cases of poverty (Trademinister.gov.au, 2017). For the past two and half decades, Malaysia has competed poorly in product development (World Bank, 2017). Under the rule of The United Malays National Organization (UMNO), Malaysia retains its position in trade having 25.8% of the total output and 28% of the personal income tax charge (Heritage.org, 2017). The mean used rate of tariff is 4.4% (Heritage.org, 2017).

Japan is also one of the more-developed countries. Since 1960, it has indicated progress in economic balance despite its less production of raw materials (Dillinger, 2017). The average per capita income for Japan is maintained at about 2% to 4% from 1980. During the 1990s, Japan was an immature creditor country rated at nominal GDP of 22.9 percent in net external assets, 2.6% of capital and financial account and 2.4% in the current report (European Central Bank, 2017). Employment in Japan is favourable. But only those with more work experience and women enjoy their increased savings. During World War 2, Japan suffered a significant loss in its economy following the bombing of Nagasaki and Hiroshima that caused a reduction in population. This was turned around by the increase in capital equipment ratio per employee. In 2011, out of 149,794 visitors to Tasmania, 4,875 were from Japan. Japan imported 3.1% of Tasmania’s Trouts, and chars sorted in 2008. If the government of Japan allows better trading activities, its economy will be sustained for longer, or it might improve. Japan’s imports cost a total of about 822.25 billion dollars. Tasmania is one of the major contributors to the Japanese economy (Utas.edu.au, 2017).

Tasmania’s Partnership and Business Relationships with Trade Partners

Vietnam happens to be a less-developed country among the top 100 significant suppliers and most complex economies. It maintained its economy at 15.8 billion dollars with a total supply of 193 billion dollars and $6.03 thousand per capita in 2015. Today, the mean GDP in US dollars for Vietnam is rated 7.4 percent with $188 billion USD (Will the shift in global economic power continue? 2017). Electronic materials worth 48.39 billion dollars are at the peak of Vietnam’s exchange activities while imports cost $21.8 billion. The top supplies go to America, China, Japan, South Korea and Germany while it imports major resources from China, South Korea, Japan and Thailand. Tasmania is privileged to invest global learning in the country (Dpac.tas.gov.au, 2012). Vietnam is the fourth biggest partner of Tasmania in exchange of goods and services. Its population increases at a rate of 0.3% with a moderate per capita income of 5 percent each year enabling easy marketing (Will the shift in global economic power continue? 2017). A prediction indicates that Vietnam’s average workers will be below 0.5% (Will the shift in global economic power continue? 2017).

Conclusion

A country with diverse and quality products can sustain any market even in hard times. Necessary resources are in high demand all across the globe. A cycle of Mutual dependency between nations helps in accessing the required products and gaining their profits. The whole world is ready to venture on a business journey with Tasmania since the revelation of its potential (Dpac.tas.gov.au, 2012).

References

Department of Foreign Affairs and Trade. (2017). Taiwan country brief. [online] Available at: https://dfat.gov.au/geo/taiwan/pages/taiwan-country-brief.aspx [Accessed 25 Oct. 2017].

Dillinger, J. (2017). The World’s Leading Import Countries. [online] WorldAtlas. Available at: https://www.worldatlas.com/articles/where-the-exports-go-the-world-s-leading-import-countries.html [Accessed 22 Oct. 2017].

Dpac.tas.gov.au. (2012). TASMANIA’S PLACE IN THE ASIAN CENTURY – ISSUES PAPER. [online] Available at: https://www.dpac.tas.gov.au/divisions/policy/asian_century?a=171448 [Accessed 22 Oct. 2017].

European Central Bank. (2017). The growing importance of emerging economies in the globalised world and its implications for the international financial architecture. [online] Available at: https://www.ecb.europa.eu/press/key/date/2007/html/sp071126_1.en.html [Accessed 22 Oct. 2017].

Heritage.org. (2017). Malaysia Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. [online] Available at: https://www.heritage.org/index/country/malaysia [Accessed 25 Oct. 2017].

Michael Hennigan, F. (2017). Germany’s record trade surplus in 2015; US, UK, France in deficit. [online] Finfacts.ie. Available at: https://www.finfacts.ie/Irish_finance_news/articleDetail.php?Germany-s-record-trade-surplus-in-2015-US-UK-France-in-deficit-520 [Accessed 22 Oct. 2017].

ORGANISATION FOR ECONOMIC CO -OPERATION AND DEVELOPMENT. (2017). NNOVATION AND GROWTH: RATIONALE FOR AN INNOVATION STRATEGY. [online] Available at: https://www.oecd.org/sti/inno/39374789.pdf [Accessed 22 Oct. 2017].

Trademinister.gov.au. (2017). Australia and Malaysia: Trading Together – Speech from from the Australian Minister for Trade. [online] Available at: https://trademinister.gov.au/speeches/2002/020729_mvt_malaysia_trading.html [Accessed 23 Oct. 2017].

Utas.edu.au. (2017). Exports. [online] Available at: https://www.utas.edu.au/library/companion_to_tasmanian_history/E/Exports.htm [Accessed 22 Oct. 2017].

Will the shift in global economic power continue?. (2017). The World in 2050. [online] Available at: https://www.pwc.com/gx/en/issues/the-economy/assets/world-in-2050-february-2015.pdf [Accessed 22 Oct. 2017].

World Bank. (2017). Overview. [online] Available at: https://www.worldbank.org/en/country/malaysia/overview [Accessed 25 Oct. 2017]