Australia and Asia Century - Case Study Example

AUSTRALIA AND ASIA CENTURY Name Instructor Institution Course Date In the 21st century, it is evident that Asia is changing the world and people all over are benefiting from the profound implications. One great example is, Australia has benefitted in its society, economy and strategic environment. For the last 20 years, both India and China have tripled what they give to the economy globally. It is estimated that by 2025 the Asian region will make up half of the world’s production (Mandal,2013, p. 23). Australia has a good chance of utilizing the opportunities flowing from Asia to the fullest. This is because Australia is among the countries with the strongest economy and has a positive outlook: Its Government does not have a lot of debt, it has strong financial public finances, and it also has a multicultural, talented and creative population that has shown high capability of coming up with new and innovative ideas. The Australian in the Asian century White Paper has tremendously played a huge role for Australia to focus on policy debates that surround regional engagement. The white paper can be considered as the first strategic and political document to show the direction as well as self-perception of Australia (Mandal,2013, p. 13). Even though the opposition government had criticisms on the white paper stating that it did not have strategic vision, it went on to state that it has impressive goals and aspirations. Therefore, this paper focuses on bringing out both the opportunities and challenges that the Asia century gives to the Australian society in relation to the white paper of 2012. The Asia century gives great opportunities to Australia which shows the white paper was a great idea to be implemented. First of all, all Australians will get equal opportunities to get skills and education that they will use to develop a strong economy and a better society. Australians should have Asian relevant capabilities that will lead to specialized skills depending on their individual choices. These capabilities are essential as they will be needed in advancing the economy and create more job opportunities as the years pass. Asia-relevant capabilities comprise of flexibility, resilience, design and creative thinking and confidence to socialize and work in Asia (Johnson et al, 2015, p.3). The quality of schools and their achievement is necessary since having good education through school leads to a skilled workforce. Australia can only retain its successful economy through world class education. According to studies done by PISA, both mathematics and reading performance has greatly gone down compared to countries like China, Singapore and South Korea. Consequently, students in Australia interacting with students from Asia will benefit from learning skills that will help them improve on their reading and also in mathematics. Businesses in Australia will be globally recognized for successfully operating in Asian markets. The reason being, both small and medium sized companies will be incorporated into the Asian markets. By doing business with Asia flow of capital, goods and services and people will be easier while Australian investors will effortlessly cease opportunities provided in Asia. It is estimated that by 2025 trade links between Australia and Asia will go as up to one third of GDP compared to one quarter today (Kainikara, 2008, p. 118).Australia will be able to learn innovative activities from Asia. Reason being, multinational companies are attracted to Asia’s large market in terms of introducing new technologies and products. Foreign investment ensures domestic savings and gives way for economic growth, more capital, support the already available jobs and also generate new opportunities. Asia century investment will boost productivity as there will be new technology, there will be more capital meant for infrastructure, and Australia’s skills capability will be enhanced through transfer of knowledge (Kainikara, 2008, p. 112). Due to continued urbanization especially in Asia combined with the natural resources that Australia has to offer, there will be a huge demand for Australia’s mineral resources and energy. Australia has a high number of resources especially in energy and minerals (Macdonald et al, 2009, p.125). It has the highest economically known reserves of nickel, lead, gold, rutile, zinc and silver. Thus Asia’s high demand for the resources Australia has to offer shows that the economy will grow even in other parts with the inclusion of manufacturing, construction and services sectors. Its exports to Asia comprise of the biggest share with Indonesia and India being more than those to China (Gilley & O'neil, 2014, p. 35). source: google images Chart of the financial progress between Australia and China With all these opportunities for Australia based on the white paper, there have been criticisms stating that it will only bring challenges and misfortunes which include the fact that Australia will have hardships on issues that revolve around foreign direct investment (FDI). The top most three challenges are: one is that there is a takeover bid by the Goodman Fielder which is an Australia-New Zealand food company from Wilmar a company from Singapore. Should the bid go through this will mean no restrictions will be imposed either by completion authorities or the Australia Foreign Investment Review Board (Setyorini, 2016, p.1). Second challenge is the ANZ bank has identified obstacles in its international business growth as a result of FDI policies found in host countries. They include limits on foreign ownerships of banks in Malaysia and China. In South Korea there is a restriction where foreign banks cannot carry out new product business and work permits mainly for personnel of foreign banks have to be first accepted by Indonesia Central Bank (Australian trade and investment, 2016, p. 1) commission. In India also, there is a limitation on how many branches a foreign bank should have. All the above policies hinder growth in the financial sector. Third reason is that Qantas is no longer in collaboration with Malaysia Airlines and this would have made them own a high class service offshore. Options that Qantas have are constrained by foreign ownership caps that function in order to institute a rule of origin for market access. There is also “a new Colombo plan” that has been allocated $100 million to help give financial support to young Australians who are studying in the region (Setyorini, 2016, p.1). There has also been a lot of focus by both the private sector and the government to come up with Asia-capable workforce that will be able to cope with Australia’s commercial activities. Fourth challenge that Australia faces is the increasing reinforcement of the influence China has. The Australian policy makers are suspicious of the fact that Beijing wants to project its increasing power into the region with a purpose which would not make America happy since its major role is to act as an offshore balancer. Fifth challenge to Australia is attaining equilibrium mainly on the Korean cape. The emergence of North Korea in the past as being a state of nuclear weapons has brought about a new tactic within the Northeast Asian security and has stated that DPRK should not be allowed to fall apart as it risks the control it has over the nuclear assets. This scenario majorly complicates the strategic interests that Australia has in Northeast Asia. Julia Gillard the Australia Prime Minister on 28th October 2012 released the Australian in the Asia Century white paper. The white paper has five priority regional relationships for Australia with Japan, China, Indonesia, and South Korea. Australia and Vietnam have also come to have close relationships. Myanmar is also a country that is trying to engage itself again with the West and the international community at large as part of its economic and political reform strategies. The Prime Minister said the White Paper objective was to ensure that Australia will be stronger by utilizing the opportunities the Asian century offers (Kainikara, 2008, p. 74)). Goal shifts in political, economic and social cultural power show that the 21stCentury is now the Asian Century. Conversely, there have been quite a number of criticisms to the white paper in regards to Australia’s future. Some of the critics state that the white paper is short on specifics (Mandal, 2013, p. 1)). For instance, one objective of the white paper is that school students will be able to learn one of four of the main Asia languages namely Japanese, Hindi, Chinese and Indonesian. Nevertheless, it does not show its commitment on when this goal will be achieved nor does it state the number of students that will eventually learn these languages. According to the director of ANDEV/IPA North Australia project, John Shipp the white paper had numerous inconsistencies and missed many opportunities. For example, it stated that the Asia capita; as well as markets were able to create a Northern food bowl while on the other hand the Food Plan stated that it could not be possible. Therefore, it was the government’s duty to clarify why the two documents differ. He continues to say that the white paper failed to go over actors like high taxes, regulation and industrial relations environment that would end the mining boom prematurely. The Asia Century in itself faces criticism despite there being forecasts predicting rising political and economic strength of Asia. There are possibilities that the high growth rate have high chances of resulting in economic slumps, revolution as well as environmental problems and most especially in China. With the increasing global warming, agricultural production is threatened as well as major urban areas. Another challenge is major corruption that affects most Asian governments. With increase in corruption no matter the efforts put in to growth it will yield fruitless results. Even with a lot of money coming in, in any government, rampant corruption tends to slow down a county’s growth. Main challenges to Australia’s ongoing engagement with Asia, and ongoing economic prosperity in the Asian Century. One of the main challenges that Australia is facing by engaging with China is the ‘two speed economy’. Australia’s trade exposed industries apart from the energy and resources sector are now at enormous pressure. There have been high exchange rates that have come as a result of terms of trade and this undermines Australia’s economy competitiveness (Setyorini, 2013, p.2). Second challenge is the power rivalry that exists between China, US and Japan. Reason being, Australia only has marginal influence over how their interactions will progress. Another challenge that Australia faces is the increasing and rise of china’s influence. Based on the deep economic relationship between China and Australia, Australia faces high risk of disruption towards China’s upward trajectory (Gilley& O'neil, 2014, p.45) When it comes to Australia and Japan’s relationship, it is still having its challenges. There is a strong tension arising from how the bi-lateral relationship is seen both in Japan and Australia. The tension is emanating from not knowing as to whether the increasing security relations between Japan and Australia are aimed at dealing with uncertainty in regional relations or China (Macdonald et al, 2009, p. 115). The major challenge for Australia with its relationship with India is the fact that India’s population lives under the international poverty line. In addition to this, there has been a huge decrease in students going for studies in Australia especially after attacks on mainly Indian students in Sydney and Melbourne. For this reason, the Indian government gave travel advisories to all students schooling in Australia. According to the Australia’s Tourism Forecasting committee the number of students applying to study in Australia has gone down by 46 percent. To the Australian economy international students bring in $13billion every year and after iron ore and coal, education is Australia’s third biggest export (Parkinson, 2012, p.1) The nature between Australia and Indonesia can be defined as multi-dimensional. Dynamic and has extensive history. One of the main challenges that Australia faces by having a relationship with Indonesia is the fact that as a result of its proximity, refugee seekers easily enter Australia (Setyorini, 2013, p.3). As a result, this has created smuggling problems to Australia. Future challenges still will arise within the relationship in the efforts of keeping the relationship solid. South Korea is considered the fourth biggest economy in Asia since it is free market economy, innovative with a workforce that is highly educated. It is also Australia’s fourth biggest trading partner. However, Australia faces a number of challenges while dealing with South Korea. For instance, there is geopolitical tension which Australia has to keep watch in the even a war erupts and therefore its business investments are not completely safe (Macdonald et al, 2009, p.86). Second challenge is the credit measuring method used in Korea is completely different than that of Australia. In order to get finance in South Korea, a lot of emphasis is put on debt to profitability, equity and liquidity ratio. Based on the studies done, it is okay to conclude that despite the few challenges the Asia century faces there are great opportunities that are bringing about development especially for developing countries partnering with Australia and other developed countries. Jobs are being created, there is urbanization and countries that once did not see eye to eye are now having strong relationships. This shows progress economically, politically and also socially as people from different cultures get to learn other languages and cultures. Australian security as well as prosperity is dependent on the happenings in Asia (Kainikara, 2008, p. 3). Australia is also meeting the growing demand for food for the rising Asian population. Not only is Asia the largest producer of goods and services the world over it is also becoming the biggest consumer. Nevertheless, for Australia this is good news as it will be able to steer big change in peoples thinking in terms of the economic relationship existing with Asia. References Australian trade and investment commission, 2016. Dollar depreciation and export performance. Retrieved on 18th October from http://www.austrade.gov.au/news/economic- analysis/dollar-depreciation-and-export-performance Gilley, B., & O'neil, A. 2014. Middle powers and the rise of China. Johnson, C., MACKIE, V. C., & MORRIS-SUZUKI, T. 2015. The social sciences in the Asian century. http://www.jstor.org/stable/10.2307/j.ctt19705xz. Kainikara, S. 2008. Australian security in the Asian century. Tuggeranong, ACT, Air Power Development Centre. Macdonald, G., Yow, Y. S., & LI, X. 2009. Innovation in China: the dawning of the Asian century. London, England, Adonis & Abbey. Mandal, P. 2013. Proceedings of the International Conference on Managing the Asian Century ICMAC 2013. Singapore, Imprint: Springer. Parkinson, M.2012. Challenges and opportunities for the Australian economy. Retrieved on 18th October 2016 from http://www.treasury.gov.au/PublicationsAndMedia/Newsroom/Speeches/2012/Challenges-and-opportunities-for-the-Aust-economy Setyorini, F. 2013. Challenges and opportunities for Indonesia and Australia relationship in the Asia Century. Retrieved on 19th October 2016 from https://goliveindonesia.com/2013/05/23/challenges-and-opportunities-for-indonesia-and-australia-relationship-in-the-asian-century/ Setyorini, C. (2016). Australia’s analytics opportunities in the Asian century. Retrieved on 19th October from http://www.iapa.org.au/Article/AustraliaSAnalyticsOpportunitiesInTheAsianCentury Read More