AUSTRALIA

* estimate

Recent Developments

• The Australian economy continued to expand steadily in 2006. The country¡¦s business investment has been facilitated by higher capacity utilization, while consumer spending has been stimulated by low unemployment, despite recent interest rate hikes. Externally, exports will continue to perform well, thanks to sustained demand for Australian commodity and resources products. In sum, GDP is forecast to grow by 3% in 2007.
  
  
• Australia is the 12th largest export market for Hong Kong. Hong Kong's total exports to Australia rose by 7% to US$3.7 billion in 2006, while its imports from Australia surged by 20% to US$2.1 billion.
  
  
• Australia has imposed a number of anti-dumping measures against certain Chinese mainland-origin products, including preserved pineapple, preserved mushrooms, sodium hydrogen carbonate, silicon, hot rolled steel plate, dichlorophenoxy-acetic acid, sodium metabisulfite and clear float glass.
  

Current Economic Situation

The Australian economy continued to expand steadily in 2006, given the robust domestic demand and strong external sales. The country's business investment has been facilitated by higher capacity utilisation amid increases in exports. Consumer spending has also performed well, thanks to low unemployment. The jobless rate has fallen below 5%, which is among the lowest levels since the 1970s, despite the fact that the housing market has slowed on the back of recent interest rate hikes.

Thanks to sustained demand for commodity and resources products globally, Australia's exports continued to expand by double-digit in 2006. Coal, oil and gas, iron ore, gold, alumina and nickel were major export commodities, with Japan, China, South Korea, the US, and New Zealand being the major export destinations. Australia's major markets are now in Asia.

Australian imports rose by 11% in 2006. Major import items included motor vehicles, crude petroleum and computers, with the US, China, Japan, Germany and Singapore being leading suppliers.

All in all, GDP is forecast to grow by 3% in 2007.


Trade Policy

Australia is a member of the World Trade Organisation (WTO). Its tariff schedule is based on the Harmonised System (HS) of coding. Most goods can be freely imported.

The Australian government has started progressive reductions of trade barriers since 1988. The general tariff rate is now at about 5%, except for special items like passenger motor vehicles (PMVs) & automotive components, alcoholic and tobacco products, and textile, clothing & footwear (TCF) products, which are subject to higher import tariffs. For instance, clothing imports are currently subject to 5%-17.5% of import tariffs.

In addition, Australia has initiated a number of anti-dumping proceedings against a number of imports from certain countries, including the Chinese mainland. Currently, there are a number of mainland-origin items subject to Australia's anti-dumping measures, including preserved pineapple, preserved mushrooms, sodium hydrogen carbonate, silicon, hot rolled steel plate, dichlorophenoxy-acetic acid (2,4-D), sodium metabisulfite and clear float glass.

Australia has been active in pursuing free trade agreements. According to the Australian government, Australia has concluded different free trade agreements with New Zealand, Singapore, the US and Thailand. Currently, it is pursuing FTAs with China, Malaysia and ASEAN. In December 2006, Australia agreed to begin negotiations on bilateral FTAs with Japan, the Gulf Cooperation Council and Chile. The country also agreed to conduct a joint study on a possible free trade agreement with South Korea.

Australia's Investment in Hong Kong

Australia has a substantial investment in Hong Kong. According to the latest available figure, total stock of direct investment from Australia amounted to US$2.3 billion as at the end of 2005. It is estimated that there are around 450 registered Australian companies in the territory. As at the end of 2006, there were about 14,590 Australian nationals residing in Hong Kong.

As of 1 June 2006, there were 21 regional headquarters and 65 regional offices of Australian companies in Hong Kong. Major Australian companies in Hong Kong include Leighton Asia (construction) and Telstra Corporation Ltd. (telecommunications).

All the "big four" banks (namely Australia & New Zealand Banking Group Ltd. (ANZ), Commonwealth Bank of Australia, National Australia Bank Limited and Westpac Banking Corporation) have presence in Hong Kong.