Australia needs to increase investment in emerging markets like China and India and could benefit from setting up food processing clusters in Australia, with products then integrated into Asian markets, according to a new report.
The latest report by the Committee for Economic Development of Australia (CEDA) , Outbound investment, has found that the rise of protectionism associated with Brexit and the election of Donald Trump as US President mean that, across the broader economy, Australia’s future lies with Asia.
“Outbound investment from Australia is currently more than $540 billion per year and the top three recipients of Australia’s outbound investment are currently the US, the UK and New Zealand,” CEDA Research and Policy Committee Chairman, Professor Rodney Maddock said.
“However, the amount that flows to China and India combined only accounts for 2.9 per cent of Australia’s total outbound investment.”
Maddock pointed out that, in terms of the food and beverage sector, there is a real opportunity for Australian outbound investment in distribution systems for chilled and fresh foods in Asia, which are still poor.
Maddock said that, across all sectors, outbound investment is often viewed negatively as a means of offshoring local jobs.
“In reality, it can deliver significant economic benefits to the Australian economy and in fact create jobs both here in Australia and abroad,” he said.
“Outbound investment by Australian companies can provide access to global value chains and increase demand and awareness of Australian products and services.
“The CEDA report recommends that the Federal Government needs to better articulate the economic benefits of outbound investment.”