THERE is vast potential for stronger trade links between Australia and Asean, with the possibility for Australia-Asean trade and investment to exceed US$210 billion by 2025, according to the latest ANZ Opportunity Asia Report released on Friday.
The survey of 1,000 Australian business decision makers found that about a third were currently active in Asia. Another quarter were planning to venture into the region.
Of firms active in Asia, 67 per cent trade with Asean countries, and business dealings in Asean region contributed 27 per cent of their total revenue. Yet although the current trade in goods and services is strong, much of it is concentrated in four out of the ten Asean markets, noted the report: Singapore, Malaysia, Indonesia, and Thailand.
Asean accounted for 13.7 per cent of Australia's total two-way trade or US$78.8 billion in the 2016-2017 financial year -- a share that has been largely stagnant in recent years.
Said the report: "While a static trade share could be considered a positive outcome considering the falling shares with Australia’s traditional trading partners Europe, the United States and Japan, there is potential to more fully optimise the trading relationship." Furthermore, two-way investment flows between Asean and Australia are heavily concentrated in Singapore.
The opportunities which ANZ highlighted included:
- Asean's increasing infrastructure gap, driven by rapid urbanisation and a growing middle class, which includes not just transport but also e-government, education and healthcare
- Information and communication technology, as internet penetration soars and e-commerce takes off
- Health technology and services, as a shortage in skilled workers and infrastructure is likely to be a region-wide challenge
- Education, by attracting international students from the region
- Automotive manufacturing, with Thailand already a main player