Australias Economic Growth Relies on Asias Demand for Commodities - Example

Insert name Instructors’ name Course Date Australia’s economic growth relies on Asia’s demand for commodities Currently, the US and many European economies are both coupled by a financial crisis which include; bank instability and the growing debt crisis .Australia through a number of linkages which affected by the serious decrease in the US and European economies to do a great risk to development. Australia is one the richest developed countries. Australia’s total wealth is over 6.4 trillion US dollars and it is one of the exactly industrialized countries in the world. In addition, Australia is a free economy with highly educated labors. The main idea which supporting the Australia economy is goods exports (Knight, Heazle & Halvorson 2011). Over the past few years, there has been a popular boom in the Asian economy offering new opportunities for the investors wishing to variety from the European markets. Australia’s low debt level has provided the economy with the ability to cope with the inside demand through the ideas of flexible financial policies. Australia has a lot of benefits from the growth and development of the Asian market as it is one of the main consumers of Australian products to date. In fact, the Australian economic growth receives a boost from the mining and agricultural sectors (Schularick 2012. pp. 881-897). Both the mining and agricultural sectors export a large part of their products to the East Asian markets. Australia’s growth described by the size of transactions carried out in the Australian shares exchange. The stock exchange ranks ninth in the world, and Australia has a stable economy (Mclean 2012). Further comparison means that, the purchasing power equals give to Australia its strong economy is higher than that of Germany, the UK and France. However, the global climate change has negative affected Australia which is now vulnerable to bad weather conditions which may lead to floods and dry. The intention of this discussion is to describe clearly how Australia’s economic growth relies on Asia’s prevalent demand for resources. In regards to (Miller pp. 634-658).Over the past 5 years, a huge number of funds have been entered in Australia to finance the mining and agricultural sectors. Australia has been riding high on the wave of Asia’s economic growth .The demand for coal; iron ore among other minerals by China and other markets has leaded the growth of the Australian economy. In the recent years, goods prices have gone up, and the country has attracted investors into the mining fields, processing factory. In addition, the ways have also become particularly profitable investors in the recent period. This need for resources or rise in demand has leaded to the recent increase in prices for the goods demanded. Australia’s growth in the recent past has been consisted to the export of mineral products to the developing Asian market. However, the description with which Australia has achieved its growth underlies some weakening fundamentals. This is described by the fact that, Australia has decreased in income growth since 2005 while capital productivity has reduced. It makes it to be one of the biggest short factors on income growth. Australia has achieved many structural changes in the recent years because the growth and industrialization in Asian economy (Lowe 2012). The growth and industrialization taking place in Asia is available for a market for various Australian goods. Great effect in the Australian economy has been pointed out by the rate at which the resources sector is getting more and more. Another indicator of growth is the interest of Australians to borrow to achieve assets for houses. The Asian market is directly linked with this growth in Australia due to a number of reasons. Australia being an already established economy gives the country an upper hand over the emerging Asian markets. In addition, the United States of America and other European economies are crumbling with debt and this makes Australia the wanted choice for the developing Asian countries. Australia is a useful investment destination because the government has planned fiscal policies and various free trade agreements that suit the needs of international investors (Lowe 2012). Australia has successfully been able to hitch itself on Asia’s urbanization hence the country’s economy has prospered to an amazing extent. Australia is rich in minerals which Asia needs for growth and development. It is due to this friendly relationship that the Australian economy quickly grown in the recent past. Hume (2012) indicates that a country of only 22 million people has become one of General electric’s viable markets. As a matter of fact, the operations of General electric in Australia are bigger than the company’s operation in China. It is evident that as Asia achieves its city status, the principal benefactor has been Australia and not any other developed nation. Through the resource boom experienced in Australia, the country’s currency has been stronger to ensure that rival manufacturers can no longer compete. Since the Australian currency started to increase strength many years ago, tourism and education have decreased. It is expensive for holiday makers and students to buy the new upcoming rates. On the other hand, the resource industry is well paying. The non-mining parts of the economy are unable to staff and this is another worrying trend. The resource sector is hence the main point of the Australian economy. Analysts guess that once the Asian economy is stable and fully grown, Australia will decrease as a result of a credit bubble among other bad actions (Hume 2012). It is evident that there are close ties between the Asian demand for goods and the Australian economic development. The wish for growth in Asia has led to prevention in demand for resources. Australia has become the greatest benefactor because it is a developed country close to Asia and stable enough to produce the required minerals (Nieuwenhuysen, Lloyd & Mead 2011). The urbanization process taking place in Asia has fostered the development in the Australian economy in various sectors. Mining procedures in Australia have hit an all time high as well as the processing and transport sector. These are among the responses the Australian economy has had in the recent years. According to various analysts in the financial sector, the demand for goods give out from Asia has promoted laziness in the Australian government (Arnold 2012. pp. 906-920).This means that the Australian government seems to be uniquely relying on the supply of goods to Asia to give out economic growth. This is described by the fact that, tourism and education sectors are no longer income options in Australia compared to the mining effort in the country. In addition, other economic sectors excluding the mining sectors cannot longer attract nor continuing laborers as these sectors cannot keep up with the wage rate popular in the mining sector. The Australian government should be keen to assess variety steps supporting in mind. Asia will soon achieve the urbanization status being found. Once Asia is fully developed, the demand for resources will be small. If demand for goods in Asia dropped, the Australian economy would be affected. To lighten this affection from happening, it is careful that the Australian government identifies other useful opportunities that will improve the current economic conditions in the country supporting in mind that the Asian demand might contract or even broken. The Rio Tinto group is one of the multinationals that have deeply invested in the Australian economy (Wilson 2009). The multinational corporation deals in mining. Rio Tinto group is one of the largest mining organizations in the world with a success history. The company has a stable financial record as it is one of the first companies ranked in the mining field. Australia being a profitable destination for such a company clearly indicates that there is a market fault that needed to be filled. The Rio Tinto group is mainly in the mineral mining business which is highly demanded in Australia because Australia is one of the reliable sources of minerals that are needed to lead the growth of the greater Asian. Rio Tinto group has had a significant impact on the Australian mining effort as well as a great benefactor of the Asian demand for development resources (Bloomberg 2009). Telstra is found in Australia it serves as a telecommunications provider also known as the Telstra Corporations Limited. The company is in the business of building telecommunication networks, internet access, marketing voice and pay television products. The company facilitates communication in Australia as well as enhancing the sales and marketing procedures in the country. In addition, Telstra bears the responsibility to facilitate international communication through and out of Australia. Telstra’s growth is directly linked to the demand of telecommunications services in Asia. With the rise in demand for Australian resources, communication is a key element that facilitates the inception and completion of business transactions. The company has aided prospective investors and potential customers with a means to communicate and gets vital information that aids the decision making process. Since the privations deal of Telstra was complete, the company is more efficient in service delivery and hence a reliable service provider. This avails a means through which the clients from the thriving Asian market can get information on the resources required hence fostering faster and better decision making. In conclusion, it is clear that the demand of commodities in Asia propagates growth and development in Australia. However, the demand of commodities is as a result of Asia’s urge to attain the globalization standards. It is eminent that, the demand for commodities will drop once this development is attained. The Australian government should seek to diversify on its products as well as market to ensure that the country’s economy is not adversely affected once Asia is fully developed. 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