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AUSTRALIA IN THE ASIAN CENTURY CHRIS BARRETT AMBASSADOR OF AUSTRALIA TO THE OECD PARIS, 12 FEBRUARY 2013.

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Presentation on theme: "AUSTRALIA IN THE ASIAN CENTURY CHRIS BARRETT AMBASSADOR OF AUSTRALIA TO THE OECD PARIS, 12 FEBRUARY 2013."— Presentation transcript:

1 AUSTRALIA IN THE ASIAN CENTURY CHRIS BARRETT AMBASSADOR OF AUSTRALIA TO THE OECD PARIS, 12 FEBRUARY 2013

2 AUSTRALIA IN THE ASIAN CENTURY Setting the context for the Asian century

3 AUSTRALIA IN THE ASIAN CENTURY Some stylised facts

4 AUSTRALIA IN THE ASIAN CENTURY Asia to become the centre of global economic activity Note: At each point in time, the centre of world economic gravity was calculated by weighting the GDP for each civilisation or country and measuring its relative importance against the known world economic capacity at that point. The centre of economic gravity slowly shifted from East Asia to Europe, then more quickly to the Atlantic and in more recent decades it has shifted quickly back towards Asia. Source: McKinsey & Company (2012).

5 AUSTRALIA IN THE ASIAN CENTURY Growing consumer markets of Asia Source: Kharas & Gertz (2010).

6 AUSTRALIA IN THE ASIAN CENTURY Rising Asian economic output Percentage of world output Notes: GDP is adjusted for purchasing power parity (1990 prices). See glossary for definition of North America, Europe and Asia. Sources: Maddison (2010) and The Conference Board (2012).

7 AUSTRALIA IN THE ASIAN CENTURY World output shares Asia Notes: GDP adjusted for purchasing power parity (2011 prices). See glossary for the definition of country groupings. Sources: The Conference Board (2012), IMF (2012c), Maddison (2010) and Treasury projections. World

8 AUSTRALIA IN THE ASIAN CENTURY Share of world output growth World Asia Note: GDP adjusted for purchasing power parity (2011 prices). See glossary for the definition of country groupings. Sources: The Conference Board (2012), IMF (2012c), Maddison (2010) and Treasury projections.

9 AUSTRALIA IN THE ASIAN CENTURY Long-term GDP growth projections for China and India ChinaIndia Sources: BREE (2012a), Buiter & Rahbari (2011), HSBC (2012), OECD (2012b), Wilson et al. (2011), World Bank & DRC (2012) and Treasury projections.

10 AUSTRALIA IN THE ASIAN CENTURY Asia’s share of world merchandise trade Note: See glossary for definition of Asia. Source: Treasury projections based on IMF (2012b).

11 AUSTRALIA IN THE ASIAN CENTURY Services shares of output increases with income Note: Data from 1980 to 2011. GDP per person adjusted for purchasing power parity (2011 prices) Sources: The Conference Board (2012) and World Bank (2012b).

12 AUSTRALIA IN THE ASIAN CENTURY Implications for Australia

13 AUSTRALIA IN THE ASIAN CENTURY Correlations - Australian, US and Chinese output growth Rolling correlation of real quarterly growth, 10-year window Source: Lowe (2010).

14 AUSTRALIA IN THE ASIAN CENTURY Australia’s trade links Two-way trade with Australia Notes: Consistent with the business-as-usual scenario (Chapter 4). See glossary for definitions of country groupings and the details of the Treasury projections. Source: Treasury projections based on ABS data.

15 AUSTRALIA IN THE ASIAN CENTURY Australian real GDP and industry composition Note: Consistent with the business-as-usual scenario. Real GDP allocated to sectors based on nominal value added shares. Data are in 2009–10 dollars. Sources: Treasury projections based on ABS data and Australian Government (2011c).

16 AUSTRALIA IN THE ASIAN CENTURY Composition of Australia’s exports, by industry To the worldTo Asia Note: Consistent with the business-as-usual scenario. See glossary for definition of Asia. Source: Treasury projections based on ABS data.

17 AUSTRALIA IN THE ASIAN CENTURY Growth in international student enrolments in Australia Note: VET stands for vocational education and training. ELICOS stands for English language intensive courses for overseas students. ‘Other’ includes non-award courses and enabling courses. Source: AEI (2012b).

18 AUSTRALIA IN THE ASIAN CENTURY Visitor arrivals in Australia Source: TFC (2012).

19 AUSTRALIA IN THE ASIAN CENTURY Demand for food will grow Global demand by commodityGlobal food demand Source: Linehan et al. (2012).

20 AUSTRALIA IN THE ASIAN CENTURY Scientific links between Australia and Asian nations 20022010 Sources: Thomson Reuters (2011a) and Scopus.

21 AUSTRALIA IN THE ASIAN CENTURY Official development assistance to Asia Note: (a) India’s measured assistance is from 2005–06 to 2008–09, and is not strictly comparable with other nations as it differs from the OECD Development Assistance Committee’s criteria; it excludes lines of credit. (b) China’s measured assistance is for 2005–2008 and is not strictly comparable with other nations as it differs from the OECD Development Assistance Committee’s criteria; it includes grants, interest-free loans and subsidies for concessional loans. Estimates of assistance that include concessional loans and debt relief are one-and-a-half to three times higher. Sources: OECD (2007a and 2012a), Smith, Fordelone & Zimmermann (2010) and Information Office of the State Council (2011).

22 AUSTRALIA IN THE ASIAN CENTURY PISA 2009 ReadingMathsScience 1Shanghai 2KoreaSingaporeFinland 3 Hong Kong 4 KoreaSingapore 5 Chinese TaipeiJapan

23 AUSTRALIA IN THE ASIAN CENTURY The policy response

24 AUSTRALIA IN THE ASIAN CENTURY Roadmap to navigate the Asian century

25 AUSTRALIA IN THE ASIAN CENTURY Building capabilities for the Asian century Social foundations Broad capabilities Specialised capabilities Definition: Specialised skills for the Asian century such as engineering or Asia expertise. Responsibility: Our tertiary institutions are central to developing these capabilities. Businesses and governments will build and embed them. Foundational knowledge and skills that all Australians should hold. Our education systems, especially schools, support our basic understanding of Asia. Businesses and governments will prioritise these capabilities. Our democratic institutions, social systems and social values. Governments, businesses and communities develop and maintain foundations.

26 AUSTRALIA IN THE ASIAN CENTURY Five key priorities and selected 2025 targets 1.Reinforce economic strength – 2025: world top 5 in 2025 for ease of doing business; world top 10 for innovation systems 2.Building capabilities – 2025: world top 5 school system, 10 universities in world top 100 – Every Australian student to have access to an Asian language 3.Expanding and integrating regional markets – 2025: Australia’s trade links with Asia to be at least 33% of GDP 4.Deepen and broaden relationships with the region – 2025: one-third of board members of Australia’s top 200 public companies and one-third of public service senior leadership to have deep experience in Asia 5.Sustaining regional security – 2025: a region of sustainable security in which habits of cooperation are the norm

27 AUSTRALIA IN THE ASIAN CENTURY Selected ‘early harvest’ initiatives  Full implementation of the new Australian Curriculum, including the cross-curriculum priority of “Asia and Australia’s engagement with Asia”  All schools to use National Broadband Network to engage with one school in the region to support Asian language teaching  12,000 Australia Awards to Asian nations over the next 5 years to promote people-to-people links  Asian Century Business Engagement Plan, supporting business missions under the leadership of Trade Minister Craig Emerson


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