Leslie Massey
Australia has a relatively open, trade-exposed economy, importing approximately $227.3 billion worth of commodities in 2018. The country's main imports are petroleum, crude oils, and cars, with other notable imports including furniture, bedding, lighting, signs, prefab buildings, and plastics. Australia's major import partners include China, the United States, Germany, Malaysia, Singapore, and New Zealand. The country's strong economic growth, averaging 3% annually, can be attributed to its deep trade ties with Asian countries and its significant exports of natural resources, such as iron ore, coal, and gas.
| Characteristics | Values |
|---|---|
| Australia's imports in 2018 | $227.3 billion |
| Australia's imports as a percentage of global imports | 1.3% |
| Australia's top imports | Petroleum, crude oils, cars, furniture, bedding, lighting, signs, prefab buildings, plastic and plastic articles |
| Australia's major import origins | China (24%), the United States (10%), Germany (4.6%), Malaysia (4%), Singapore (3.2%), New Zealand (2.8%) |
| Australia's lesser import origins | Italy, France, Spain, the United Kingdom, Indonesia, South Africa, and other countries within Asia and Europe |
| Australia's economy | Open, trade-exposed, with uninterrupted annual economic growth of about 3% each year |
| Australia's main export | Iron ore, accounting for more than 30% of the world's supply |
| Australia's other natural resources | Second-largest accessible reserves of iron ore, fifth-largest reserves of coal, and significant gas resources |
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What You'll Learn
- Australia's main imports include petroleum, crude oils and cars
- China is Australia's biggest import partner, contributing 24% of imports
- The US is another major import partner, contributing 10% of imports
- Australia's open economy means global demand impacts its economy
- Australia's imports were worth $227.3 billion in 2018
Australia's main imports include petroleum, crude oils and cars
Australia imported about $227.3 billion worth of commodities from around the world in 2018, with petroleum, crude oil, and cars being the main imports. The country's imports represent 1.3% of global imports, which were estimated at $17.788 trillion.
Australia's refineries import around 83% of the crude oil they process from over 17 countries, with Asia being the primary source (40%), followed by Africa (18%) and the Middle East (17%). Total imports of crude oil from the Middle East were 13%, with all imports sourced from the UAE. Australia also imports refined petroleum products from Singapore, which may originate from the Middle East due to Singapore's role as a regional trade center.
Australia is a significant oil producer, yet it exports 75% of its crude oil production, with Indonesia and Singapore being the largest recipients. Simultaneously, the country's reliance on importing refined petroleum is increasing as local production declines. Australia is on track to be 100% reliant on imported petroleum by 2030, with its refineries already importing the vast majority of their crude oil.
In addition to petroleum and crude oil, cars are also among Australia's top imports. The country's major import origins include China (24%), the United States (10%), Germany (4.6%), Malaysia (4%), Singapore (3.2%), and New Zealand (2.8%).
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China is Australia's biggest import partner, contributing 24% of imports
Australia has a relatively open, trade-exposed economy, with deep trade ties to the Asian region. Australia's largest import partner is China, which accounts for 24% of its total import origins, valued at $47 billion in 2009. This makes up a significant proportion of Australia's $227.3 billion worth of global imports in 2018.
China's exports to Australia include clothing, communications equipment, computers, prams, toys, games, sporting goods, furniture, and televisions. In 2019-2020, the three largest import categories from China made up a third of the value of all of Australia's imports from the country. These categories include telecommunications equipment, and office and ADP machines.
The strong trade relationship between the two countries has developed well beyond its modest beginnings in the 1970s. Two-way merchandise trade has grown from A$113 million in 1973 to A$78.2 billion in 2009. In 2009, China became Australia's largest export market, with total merchandise exports to China valued at A$42.4 billion, an increase of 31.2% over the previous year.
The complementary nature of the Australian and Chinese economies has led to rapid growth in trade over the past decade. The signing of the China-Australia Free Trade Agreement (ChAFTA) in December 2015 has also contributed to significant growth in bilateral trade.
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The US is another major import partner, contributing 10% of imports
Australia and the US have a strong economic partnership, with the US being Australia's largest economic partner. The two countries have a history of working together to promote economic prosperity through free and open trade. This relationship is underpinned by the Australia-United States Free Trade Agreement (AUSFTA), which came into effect in 2005. Since then, two-way trade has grown from US$32 billion to US$77 billion, with US goods exports to Australia in 2024 reaching $34.6 billion.
The US is Australia's second-largest two-way trading partner, contributing 10% of imports. This is despite the fact that Australia usually maintains a trade deficit with the US, importing more than it exports. Under AUSFTA, nearly 99% of US imports enter Australia tariff-free. However, some US politicians have argued that Australia's strict biosecurity controls are a barrier to trade, particularly for agricultural goods.
The trade relationship between the two countries is diverse, with Australian companies operating in 83 different industries in California alone. For example, global car makers are reorganising in response to new US tariffs on automotive imports, with some considering pulling models from Australia. On the other hand, Australian textile, auto, and food manufacturing have benefited from cheaper imports and the ability to produce raw materials at home while processing them offshore.
The economic partnership between Australia and the US extends beyond trade to include investment. Approximately a quarter of Australia's inward foreign investment originates from the United States, totalling US$740 billion or AUD$1.09 trillion. This investment relationship is valued at US$1.6 trillion.
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Australia's open economy means global demand impacts its economy
Australia's economy is largely impacted by global demand due to its open and trade-exposed nature. This means that fluctuations in other countries' demand for Australian goods and services can significantly affect its economy. For instance, if there is an increase in global demand for Australian exports, and this is not matched by a corresponding increase in supply, the prices of those exports will rise. This relationship between export and import prices is known as the "terms of trade".
During the 2005-2011 terms of trade boom, Australia experienced very large increases in the prices of some of its commodity exports, leading to a significant impact on its economy. This boom was driven by increased demand for commodities, which resulted in higher investment in mines and infrastructure. This, in turn, led to increased demand for workers in the mining sector and related industries, boosting employment and wages. As a result, household incomes increased, leading to higher consumption and spending on goods and services.
Australia's robust economy is closely tied to its strong trade relationships with the Asian region, particularly China, which accounts for 24% of its total import origins. Additionally, Australia's top export, iron ore, of which it has the second-largest accessible reserves in the world, further contributes to its economic growth. Australia's uninterrupted annual economic growth is steadily increasing at about 3% each year, showcasing the impact of global demand on its open economy.
The open nature of Australia's economy makes it susceptible to global economic fluctuations. For example, during periods of high global demand for commodities, mining firms expand their operations to increase production and profit from higher prices. This leads to increased investment in mines and mining infrastructure, as seen during the terms of trade boom. However, when global demand decreases, it can negatively affect Australia's economy, highlighting the two-way impact of global demand on Australia's economic landscape.
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Australia's imports were worth $227.3 billion in 2018
Other notable import partners of Australia include Germany, Malaysia, Singapore, and New Zealand, each accounting for 4.6%, 4%, 3.2%, and 2.8%, respectively, of the country's total import origins. Additionally, Australia has minor trade relationships with Italy, France, Spain, the United Kingdom, Indonesia, South Africa, and other countries within Asia and Europe.
Australia's import landscape is shaped by its robust economy, which has experienced uninterrupted annual growth of approximately 3% each year. This economic strength is largely attributed to the country's strong trade ties with the Asian region and its significant export of natural resources, particularly iron ore, of which Australia possesses the second-largest accessible reserves globally.
Furthermore, Australia's imports are influenced by its position as a continent with a largely desert geography. This unique characteristic results in a heavy reliance on its coastal economy to sustain its population. The country's imports are essential to meet the diverse needs of its people and support its overall economic well-being.
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Frequently asked questions
Australia imports goods because it has an open, trade-exposed economy. This means that the country's economy is significantly impacted by changes in global demand for Australian goods and services.
Australia's main imports include petroleum, crude oils, cars, furniture, bedding, lighting, signs, prefab buildings, plastic, and plastic articles.
Australia's major import partners include China, the United States, Germany, Malaysia, Singapore, and New Zealand. China accounts for the largest share, at 24% of its total import origins.
Imports play a crucial role in Australia's economy. For example, increased imports can lead to higher demand for workers in sectors related to international trade, such as transport and logistics. This can result in higher wages and increased household consumption, impacting government revenue and shareholder profits.
