China key to global confidence
(16 November 2012 – Australia) The latest Global Connections report from HSBC reveals the return of trade confidence to Australian businesses largely driven by a more positive outlook for international trade over the next six months.
In the longer term, the report forecasts greater competition from other markets for Australia’s share of trade with China. It shows an expectation of a rapid increase in intra-Asian trade, with particularly fast growth in new emerging markets such as Malaysia.
HSBC’s Global Connections report combines HSBC’s bi-annual Trade Confidence Index with a five, 10 and 15 year trade forecast. It is the first comprehensive exploration of the future opportunities for businesses operating internationally and combines short term and long term trade trends to reveal trade trends globally.
The bank’s Trade Confidence Index showed a rebound in Australian companies’ trade confidence from a three-year low point in the first quarter of this year.
The rebound coincides with a stabilising in China’s growth and a bounce in Chinese companies’ trade confidence.
In the report’s release, head of Commercial Banking for HSBC Bank Australia, James Hogan, said: "The buoyancy in Australian companies’ trade outlook reflects a bottoming out of China’s downturn.
"It is also a likely response to exchange rate-sensitive Australian companies adapting to the structurally high Australian dollar which has been at parity with the US dollar for more than two years now," Hogan said.
The Index also found 85 percent of Australian traders expect business activity to increase over the next six months (83 percent in 1Q12). However, 43 percent say they expect a decline in the global economy over the next six months. This may reflect the rapidly shifting composition of global growth, with Australia’s major trading partners outpacing global growth.
HSBC Global Connections predicts that not only will China remain Australia’s largest trade partner but its proportion of our total trade will increase.
According to the report, in 2011 China represented 27 percent of Australia’s total exports, it will represent 40 percent of our total exports between 2013-2030, and more than 50 percent between 2020-30.
"This is a strong reminder of why Australia and Australian companies need to position themselves to ensure we maximise the growth opportunities in Asia over the coming years. This will happen by strengthening and investing further across the key areas of productivity including Asia relevant skills, innovation, infrastructure and regulatory reform," Hogan said.
HSBC’s Global Connections report combines HSBC’s bi-annual Trade Confidence Index with a five, 10 and 15 year trade forecast. It is the first comprehensive exploration of the future opportunities for businesses operating internationally and combines short term and long term trade trends to reveal trade trends globally.
The bank’s Trade Confidence Index showed a rebound in Australian companies’ trade confidence from a three-year low point in the first quarter of this year.
The rebound coincides with a stabilising in China’s growth and a bounce in Chinese companies’ trade confidence.
In the report’s release, head of Commercial Banking for HSBC Bank Australia, James Hogan, said: "The buoyancy in Australian companies’ trade outlook reflects a bottoming out of China’s downturn.
"It is also a likely response to exchange rate-sensitive Australian companies adapting to the structurally high Australian dollar which has been at parity with the US dollar for more than two years now," Hogan said.
The Index also found 85 percent of Australian traders expect business activity to increase over the next six months (83 percent in 1Q12). However, 43 percent say they expect a decline in the global economy over the next six months. This may reflect the rapidly shifting composition of global growth, with Australia’s major trading partners outpacing global growth.
HSBC Global Connections predicts that not only will China remain Australia’s largest trade partner but its proportion of our total trade will increase.
According to the report, in 2011 China represented 27 percent of Australia’s total exports, it will represent 40 percent of our total exports between 2013-2030, and more than 50 percent between 2020-30.
"This is a strong reminder of why Australia and Australian companies need to position themselves to ensure we maximise the growth opportunities in Asia over the coming years. This will happen by strengthening and investing further across the key areas of productivity including Asia relevant skills, innovation, infrastructure and regulatory reform," Hogan said.
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