Friday, July 15, 2011

A Long-Term View of Australian Exports

I'm currently finalising an article on Australian-Asian relations and the editors wanted me to include some data on Australian trade to show how Australia's trading relationships have shifted to Asia. One of the best sources is Brian Pinkstone's Global Connections, published many years ago and its data is not recent enough for my purposes.

Another problem is that most long-term data is for merchandise (or goods trade) and does not, therefore, include services trade, which accounted for 18.4 percent of total exports in 2010. So our long-term comparison here is for goods exports. (I'd love to hear from someone who has a long-term data series for goods and services exports and imports).

What I'm interested in here is the percentage of total exports (the data is also available for imports, but I do have some sort of social life so I will leave that for another day). This means that care needs to be taken in analysing the tables and graphs to realise that changing shares do not necessarily represent increases or decreases in trade.

For example while Japan's share of total trade may have fallen, it doesn't mean that trade with Japan has fallen. Indeed, while Japan's share of exports fell, total exports to Japan continued to grow rapidly in dollar terms. To avoid this misperception you can go to the original data sources to see absolute figures in dollar terms.

Presenting this data in graphic form is particularly illuminating, showing how much China's trade share has grown in recent years, how rapid Japan's trade share grew from the 1960s and how the UK went from almost total domination of Australia's exports to relative insignificance. What also interested me was how important exports to France had been in the early part of the 20th century (reaching as high as 14.25 percent in 1910.

The total trade figures also reveal how disastrous the Great Depression was for Australian trade with the dollar amount of trade dropping from $327,604 (converted form pounds) in 1920-21 to $121,919 in 1930-31. Could a disaster like this ever again hit the world and Australia? While trade fell rapidly during the recent crisis, it recovered relatively quickly, especially in Asia.

Australia’s Major Merchandise Export Markets 1901-2010
Percentage of Total Merchandise Trade

Sources: Author's calculations based on DFAT (2002) Direction of Trade Time Series 2000-01 One Hundred Years of Trade, February <> and DFAT (2011) Composition of Trade 2010, June <>. 

For those of you whose eyes glaze over at a table like this, I have included some graphs to make the picture clearer.

Australia’s Major Merchandise Export Markets 1901-2010
US, UK, China, Japan, Korea and India 

I have separated out the various graphs to make the comparisons clearer.

Our reliance on the United Kingdom for the first 30-50 years of the 20th century is astonishing. The UK accounted for almost 90 per cent of trade in 1930-31. The importance of exports to the United States during the war and after during the occupation of Japan and the war in Korea is also clear from the figures for 1940-41 and 1950-51.

Australia’s Major Merchandise Export Markets 1901-2010
US and UK

Japan's rising share begins in the post-war period and grows over the 1950s and 1960s as the UK's share declines. Its share plateaus after this as the rest of Asia becomes more important from the 1970s onwards. China's rapidly growing share of trade in the first 10 years of the 21st century is truly astounding.

Australia’s Major Merchandise Export Markets 1901-2010
 China and Japan

And while many are excited about India's rise, South Korea is often underplayed as an essential trade partner.

 Australia’s Major Merchandise Export Markets 1901-2010
India and South Korea

Finally a comparison of our dependence on Britain and dependence on Japan is made clear by the following.

Australia’s Major Merchandise Export Markets 1901-2010
China and the United Kingdom 

For those interested in the current state of play for goods and services, DFAT provides figures for calendar year 2010.

1 comment:

  1. Thank you for all your blogposts, they will help a lot towards the exam next week.




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