StudentShare solutions
Triangle menu

Foreign Direct Investment in Australia - Essay Example

Not dowloaded yet

Extract of sample
Foreign Direct Investment in Australia

Demand for goods and services in the Pilbara's state, Western Australia, grew by 11% in 2007. Studies have touted the benefits of foreign direct investment. (China Elections and Governance, May 8, 2008). Chinese investment in Australia's iron-ore business is increasing. Gindalbie, an Australian iron-ore miner, and Ansteel, a Chinese steelmaker, agreed to invest A$1.8 billion in a joint venture to develop a mine in Western Australia in 2007. This new investment translates to5,000 new jobs. (China Elections and Governance, May 8, 2008) Foreign direct investment (FDI) should be free from the strict controls which are implemented by host governments. (Main Idea Statement).
Foreign direct investment has speeded up the economic development of Australia. If the foreign direct investment in the iron ore and coal mining sector continues, Western Australia will need an extra 400,000 workers within 10 years ding to the Australian Chamber of Commerce. Australia has entered its 17th year of uninterrupted growth. The pace of domestic demand that monetary authorities have pushed interest rates to their highest in close to 12 years in order to combat inflation. Inflation has been identified as the country's chief economic ill. Skills shortage and infrastructure bottlenecks at congested ports continue to hound the growing economy. Due to the massive foreign direct investments, Australia's unemployment record is at a 33-year low, net immigration is at a record high and the prices paid for Australia's most important exports such as iron ore, coal and have risen. Moreover, household wealth has more than doubled in 15 years, the national car fleet is younger than before and contains more luxury brands, while homes are replete with high-end consumer electronics. The federal and state governments have registered budget surpluses and A$31bn (US$28bn, 14bn, 18bn) in tax cuts will soon be handed to the twenty one million population. The China-led boom in Australia is expected to last for many years as China is heavily dependent on imported raw materials for industrial production.
British foreign direct investment in Australia spans several industries. The UK companies dominate EU direct investment in Australia at about 53 per cent. The UK is the second-largest source of direct investment in Australia behind the United States. The level of the UK's direct investment in Australia was about $51 billion. British firms held substantial investments in Australia, setting up operations in the resources and energy sector (for example, Shell and Rio Tinto-Zinc), telecommunications (Vodafone and British Telecommunications) and food and beverages (Cadbury and Unilever). (DFAT, 2005). Moreover, Germany has 330 subsidiary companies and 470 branch offices in Australia. German investments are in banking and finance (Deutsche Bank), automotives (DaimlerChrysler, BMW, Bosch, Hella and VDO), telecommunications (Siemens) and chemicals (Boehringer, Schering). These investments have increased the economic growth of Australia. (DFAT Report, 2005)
Free trade fosters the inflow of foreign direct investment hence, enhancing competition and innovation. (Heritage website). One of the supporting reasons for free trade is greater access to a greater variety of goods and services.
The second argument is that trade generates economic growth. The Asean Free Trade Area registered a growth of 8% per annum due to the influx of foreign direct ...Show more

Summary

China's demand for iron ore has driven the growth of Rio Tinto. BHP Billiton, Vale and Rio Tinto, control about 70% of the world's trade in iron ore. Each year they negotiate annual supply contracts with their main customers, and as demand has surged, so has the price…
Author : melvinhirthe
Foreign Direct Investment in Australia essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Foreign Direct Investment in Australia"
with a personal 20% discount.
Grab the best paper

Related Essays

The global pattern of foreign direct investment in the years 2000-2011
It is treated as in important source of income for different countries. Global foreign direct investment (FDI) is the amount investment made by different Transnational Corporations (TNCs) in different countries of the world. There are generally two different types of investments which are: Inward foreign direct investment (FDI), and Outward foreign direct investment (FDI) This resulting sum of these two types of foreign direct investment is known as ‘net foreign direct investment (FDI) flow’, which can be either negative or positive (Wheeler, & Mody, 1992).
12 pages (3000 words) Essay
Case Study Foreign Direct Investment
Armed with a financial budget of approximately $500m, the company should consider whether it will pursue Foreign Direct Investments in South Africa and Vietnam, because of the prevailing GEAR strategy in the former, as well as the one party political climate, as well as the population of the market segment be targeted in the latter.
12 pages (3000 words) Essay
Foreign Direct Investment
Eventually, countries will continue to entice high level of investment coming specifically from foreign enterprises. It is believed that trans-national firms will consider this as potentially beneficial for their operations. Globalisation is also considered as a primary contributor to the methods used to develop foreign direct investments.
12 pages (3000 words) Essay
Foreign Direct Investment---Economics
(Wikipedia, 2006). After the 1960's, foreign direct investments (FDI) have increased at a steady rate, with FDI stocks making up twenty percent of the world's Gross Domestic Product (GDP). Currently, China leads the world in foreign direct investments.
8 pages (2000 words) Essay
Analysing factors effecting Foreign Direct Investment in China
The people's Republic of China (PRC or China, for short) has had a long tradition of isolation. In 1979, Deng Xiaoping opened his country to the world. Although his bloody 1989 put-down of protestors in Tiananmen Square was a definite setback for progress, China is rapidly trying to close the gap between itself and economically advance nations and to establish itself as an economic power in the Pacific Rim.
13 pages (3250 words) Essay
Analysing factors effecting Foreign Direct Investment in China
The people’s Republic of China (PRC or China, for short) has had a long tradition of isolation. In 1979, Deng Xiaoping opened his country to the world. Although his bloody 1989 put-down of protestors in Tiananmen Square was a definite setback for progress, China is rapidly trying to close the gap between itself and economically advance nations and to establish itself as an economic power in the Pacific Rim.
10 pages (2500 words) Essay
Foreign Direct Investment

The author states that a multinational firm in a developed country may face higher labor costs and higher production costs when locating its subsidiaries in its own home country, while a shift overseas may involve a larger initial investment but is economically beneficial in the long run because the margin of profits are higher.

9 pages (2250 words) Essay
Environmental analysis
Internet offers a variety of entertainment that is provided by the hotels such showing sports; hence reducing the number of clients. The government should come up with policies that regulate the kind of information used for advertisement, and the
1 pages (250 words) Essay
Foreign direct investment
rategies that enable entities to diversify its assets and risk across diverse countries by engaging in contractual agreements with multiple potential partners. Companies may find it advantageous by producing in foreign countries compared to exporting to those countries based on
2 pages (500 words) Essay
Foreign direct investment in the mining industry in burkina faso
to the ‘Doing Business 2011’ report published by the World bank, Burkina Faso was cited as one of ten economies take took the largest stride towards making their regulatory environment more constructive for conducting business and henceforth the country was ranked fourth
15 pages (3750 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation