Austria’s economic relations with the Asia-Pacific region
Asia and the Pacific
Asia and the Pacific, which accounts for around 60 per cent of the world's population and roughly 50 per cent of economic performance worldwide, continues to be one of the fastest growing regions in the world. Due to the governments’ relative success in containing Covid-19 in the first months of 2020, the economies of the Asia-Pacific region were quick to bounce back in the second half of 2020 - leading the way to Covid-19 recovery also internationally. Asia and the Pacific is a hub of world trade and continues to be the engine of world economic growth. Ongoing political and economic cooperation - perhaps best symbolized by the recent signing of the „Regional Comprehensive Economic Partnership“ (RCEP), the worlds’ largest free trade bloc featuring 15 Asia-Pacific countries - will further underpin the relative position of the Asia-Pacific region in the world economy.
According to preliminary data for 2020, the dynamic Asia-Pacific region now accounts for 11 per cent of Austria’s two-way trade in goods. Following the Covid-19 crisis, Austria’s two-way trade in goods decreased by -6.8 per cent year-on-year to 30.6 billion Euro (preliminary data 2020). Even then, the decline is less steep in this region than compared to the world average (-8.1 per cent). Austria’s exports to Asia-Pacific countries have plummeted by -13.6 per cent, compared to Austria’s imports, which have fallen by only -2.1 per cent.
In 2020, China was Austria’s largest goods export market in Asia and the Pacific (2.8 per cent of overall Austrian exports), followed by Japan (1.1 per cent), South Korea (0.8 per cent), Australia (0.7 per cent), and India (0.6 per cent). In 2020, Austrian exports saw year-on-year growth only in Afghanistan (+24.8 per cent), Laos (+10.4 per cent), Macao (+47.3 per cent), Nepal (+257.4 per cent) and some of the pacific island states, while faced with declining numbers for the entire remaining region. With regard to Austria’s principal partners for goods exported, the smallest decline in exports was registered for South Koreas (-3.3 per cent), followed by Japan (-5.6 per cent), Taiwan (-8.8 per cent), Singapore (-9.0 per cent), India (-9.4 per cent), and Vietnam (-9.9 per cent).
Within Asia, one has to note the growing economic and geopolitical importance of Southeast Asia and the ten individual nations - boasting impressive growth rates - that make up the powerhouse of ASEAN (Association of Southeast Asian Nations). Austria’s export-oriented economy subsequently was able to benefit from this development: Two-way goods trade with the ASEAN region almost doubled in the last ten years (2010-2020). The effects of the Covid-19 crisis, however, were quite noticeable: Austria’s two-way trade in goods with ASEAN shrank by -11.3 per cent between 2019 and 2020.
Trade with the ASEAN region accounted for 1.6 per cent of Austria’s total trade in 2020. Close-up, three countries stand out for their trade levels: Vietnam, Thailand, and Malaysia. Vietnam is leading the race with two-way trade reaching more than 1 billion euro in 2020. Austria’s export-focused economy also can benefit from European Union (EU) trade agreements with Vietnam and Singapore. Other EU trade agreements with individual ASEAN countries might follow in due time, in the last years the EU initiated trade negotiations with Indonesia, Philippines, Malaysia, and Thailand.
Finally yet importantly, Australia and New Zealand warrant our attention. Australia was the seventh most important overseas export market destination in 2020, after the USA, China, Japan, South Korea, Canada, and Mexico. The EU is currently negotiating trade agreements with Australia as well as New Zealand, which will allow trade to flourish further in the future.
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