Leslie Massey
Australia has plentiful natural resources, including the world's second-largest accessible reserves of iron ore, the fifth-largest reserves of coal, and significant gas reserves. The country has a relatively open, trade-exposed economy, meaning that changes in other countries' demand for its goods and services can significantly impact its economy. In 2024, the United States of America remained Australia's largest services import partner, accounting for 25.2% of total services imports. China is Australia's top export destination, and the United States is also a significant trading partner.
| Characteristics | Values |
|---|---|
| Largest services imports partner | United States of America (25.2%) |
| Largest exports partner for education-related travel services | China (24.7%) |
| Largest exports partner for other personal travel services | China (10.1%) |
| Largest increases of imports of travel services | Indonesia ($1,672m or 19.0%), Japan ($1,311m or 38.2%), China ($796m or 32.4%) |
| Top export destinations | China, Japan, South Korea, India |
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What You'll Learn
China: top export destination
China has long been Australia's top export destination, driven by its demand for energy and iron ore. In the 12 months to May 2024, iron ore alone accounted for 60% of Australian goods exported to China. Australia is the world's top exporter of iron ore, supplying high-grade ore to Asian countries that produce steel.
China's expanding gas market is supplied by Australia's liquefied natural gas (LNG), which is considered one of the country's largest exports. In addition to iron ore and energy, Australia exports gold, beef, lamb, and specialty grains to China. Australia's livestock industry is known for its high standards of quality and safety, making its meat exports highly desirable.
Australia is also a major supplier of educational services to China. In 2024, China was the largest export partner for education-related travel services, accounting for 24.7% of the total. This contributed to the overall growth in travel services exports, which rose by 13.1% to $78,506 million and represented 62.1% of total services exports.
While China is Australia's top export market, the United States is Australia's second-largest two-way trading partner. Bilateral trade in goods and services with the US has doubled since the Australia-USA Free Trade Agreement came into effect in 2005. Australia's most valuable exports to the US are services, including tourism, education, and business services, followed by intellectual property charges such as franchising and licensing fees.
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US: largest services import partner
Australia has a relatively open, trade-exposed economy, meaning that changes in other countries' demand for its goods and services can significantly impact its economy. The country has plentiful natural resources, including the world's second-largest accessible reserves of iron ore, the fifth-largest reserves of coal, and significant gas reserves.
The United States is Australia's largest services import partner, accounting for 25.2% of total services imports. The US is also Australia's second-largest two-way trading partner. Bilateral trade in goods and services with the US has doubled since the Australia-USA Free Trade Agreement (AUSFTA) came into effect in 2005. While Australia typically maintains a trade deficit with the US, importing more than it exports, the US is still a significant market for Australian goods and services.
Australia's most valuable exports to the US are services, including tourism, education, and business services. Intellectual property charges, such as franchising and licensing fees, are the second-largest Australian export to the US. Australian beef exports to the US have also seen strong growth, fuelled by favourable market access under the US-Australia Free Trade Agreement and a weaker Australian dollar.
The US-Australia trade relationship has faced some challenges, such as Australia's strict biosecurity controls, including the ban on fresh beef due to bovine spongiful encephalopathy (BSE). Despite these differences, the US remains a crucial trading partner for Australia, contributing to the growth and diversification of its economy.
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India: fifth-largest export partner
Australia has plentiful natural resources, including the world's second-largest accessible reserves of iron ore, the fifth-largest reserves of coal, and significant gas reserves. Commodities such as iron ore, coal, and natural gas are primarily mined and produced in Western Australia and Queensland. Australia's economy is relatively open and trade-exposed, meaning that changes in other countries' demand for its goods and services can significantly impact its economy.
China has long been Australia's top export destination due to its demand for energy and iron ore. In the 12 months to May 2024, iron ore accounted for 60% of Australian goods exported to China. The United States is Australia's second-largest two-way trading partner. Bilateral trade in goods and services with the US has doubled since the Australia-USA Free Trade Agreement (AUSFTA) came into effect in 2005. While Australia typically maintains a trade deficit with the US, importing more than it exports, the US is still a significant market for Australian goods and services. Australia's most valuable exports to the US are services, including tourism, education, and business services.
India is Australia's fifth-largest export partner. In 2024, India accounted for $35.5 billion of Australia's merchandise trade and services exports. This represented a rise of $0.5 billion (1.4%) from the previous year. India is also a significant destination for Australia's education-related travel services exports, which rose by $1,014 million (12.7%) to $9,005 million in 2024. Australia's exports of education-related travel services to China, its largest export partner in this sector, rose by $1,591 million (14.3%) to $12,710 million during the same period.
Australia's position in international supply chains is strengthened by investments in onshore refining for copper, nickel, and battery materials. The country is also a significant exporter of agricultural and natural resource goods, including specialty grains (canola, pulses), high-value beef and lamb, and gold. Australia's political stability and regulatory requirements ensure a consistent supply of goods for international markets.
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Japan: LNG and critical minerals exports
Australia and Japan have a strong trade relationship, with Japan being Australia's biggest LNG export customer. Japan's LNG demand has decreased by 25% since 2014 and is expected to drop by another 25% by 2030. This is due to Japan being over-contracted in LNG and reselling more LNG than it imports from Australia. Despite this, Japan has been underwriting new gas projects in Australia, which has helped turn Australia into a fossil fuel giant. Japanese companies sold more than 30 million tonnes to third countries in 2020, 2021, and 2022, with 38 million tonnes in 2021 alone, exceeding Australia's total LNG exports to Japan over those three years.
Japan is the world's largest provider of international public finance for gas production, and its government sees maintaining influence in the region's LNG market as important to its energy security. Japanese buyers are investing in LNG infrastructure and cultivating demand in Southeast Asia, where they are also providing engineering and consulting services. Japan's largest electricity producer, JERA, has acknowledged that its LNG imports may decline or stay the same, but that it can supply fuel to other Asian countries that need to replace coal with LNG.
While Japan continues to buy and resell Australian LNG, it is also greening its power grid. Japan plans to increase the share of renewables in its energy mix from 18% in 2019 to 37% by 2030, while reducing gas-fired power. However, Japan is still subsidizing new offshore gas projects in Australia, which is helping to maintain Australia's position as a global LNG exporter.
In addition to LNG, Australia and Japan have also strengthened their cooperation in the critical minerals sector. Australia has some of the world's largest reserves of critical minerals, including rare earths, which are crucial for clean energy technologies. The new Critical Minerals Partnership between the two countries aims to establish secure supply chains and promote information sharing and collaboration in research, investment, and commercial arrangements. This partnership will help Australia further develop its critical minerals sector and ensure a stable supply of these minerals for Japan, supporting both countries in achieving their emissions reduction targets.
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UK: gold imports
Australia has plentiful natural resources, including the world's second-largest accessible reserves of iron ore, the fifth-largest reserves of coal, and significant gas reserves. Commodities such as iron ore, coal, and natural gas are primarily mined and produced in Western Australia and Queensland. Australia's economy is relatively open and trade-exposed, meaning that changes in other countries' demand for its goods and services can significantly impact its economy.
China has long been Australia's top export destination due to its demand for energy and iron ore. However, the United States is Australia's second-largest two-way trading partner, and bilateral trade in goods and services with the US has doubled since the Australia-USA Free Trade Agreement (AUSFTA) came into effect in 2005. The US remained Australia's largest services imports partner in 2024, accounting for 25.2% of the total services imports. Australia's most valuable exports to the US are services, including tourism, education, and business services.
Australia's position as a leading energy exporter is supported by its onshore natural gas projects and offshore oil reserves, with liquefied natural gas (LNG) being the majority. Australia supplies LNG to China, Korea, and Japan's expanding gas markets. Australia also exports critical minerals such as cobalt and lithium, and specialty grains like canola and pulses. Gold is mined in large quantities in Australia and is exported to significant importers, including the UK, Singapore, and Hong Kong.
Australia's political stability and regulatory requirements ensure a consistent supply of gold for international markets. The precious metal is in high demand as an investment and for use in jewelry and electronics. Australia's top export partners for education-related travel services include China, India, and Vietnam.
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Frequently asked questions
The United States of America is Australia's largest services imports partner, accounting for 25.2% of the total services imports.
The US provides a variety of services to Australia, including tourism, education, and business services.
China is the largest exporter of services from Australia, with education-related travel services accounting for 24.7% of the total.
