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1.

What are the competitive advantages of Australia as a nation and why


does it is considered as an advanced economy? Examine its similarity with
advantages of state of California and discuss
Answer:
Australia as a nation has great competitive advantages because of the following
reasons:
It is rich in minerals ranging from Nickel, Zinc, magnesium, copper and black
coal.
Japans demand for Australias iron-ore and coking coal for its rapidly growing
steel industry.
Due to rapid industrialization of China, the demand Australias raw materials
ranging from steel to oil to coal has increased.
Australia is considered as an advanced economy because of the below factors:
It has amongst the lowest of budget deficits and debt to GDP of any other
major economies in the developed world.
Out of the major economies of the world, Australia had the 13th lowest fiscal
deficit in 2012.
Despite private foreign debt of about 88% of GDP, Australia had financed its
current account with remarkably little difficulty to date.
In similarity with state of California where the U.S. lawmakers helped to kill a bid for
Unocal Corp., a petroleum company based in California, by Chinese Oil Company
National Off shoring Oil Corp., the Australian government would not allow the
Chinese government to buy and control a key strategic asset in their country as the
Chinese government doesnt allow any other country to buy a land in China.
2. With Asias appetite for iron ore ,coal ,natural gas and mutton growing,
how do Australian
companies expand and tap in to these markets?
Answer:
With Asias appetite for iron ore, coal, natural gas and mutton growing, the
Australian companies have great opportunities to expand and tap into these
markets. As an example, due to the rapidly growing steel industry in Japan, the
demand for Australias iron ore and coking coal has increased. Also due to rapid
industrialization of China, the demand Australias raw materials ranging from steel
to oil to coal has increased. China being the top market for Australian mineral
exports has helped Australia avoid recession. In fact in 2009, China surpassed Japan
as Australias largest export market .The Australian government found out that the
two countries trade relations would provide the basis for further economic and
commercial development.
3. What are the support industries that need to be built to take Australia
into a golden future?
How does government intervene?
Answer:

As mining industry of Australia experiences an annual growth of 12 % as compared


with 2 % growth in other industries, the mining industry is a support industry for
Australia and these needs to be focused upon for the growth of the economy.
The government can intervene by making mining an attractive industry for new
start-ups by providing grants and subsidies, thus reducing the cost for these
producers.
4. As Australia promotes new industries such as Airline, shipping and
telecom with liberal
De regulation, how does it impact competition globally? What are the
challenges it might face?
Answer:
As the Australian government promotes and supports the new industries such as
Airlines, shipping and telecom with liberal De regulation, by giving them excessive
grants and subsidies, it ultimately makes them more competitive. These industries
will then reduce their prices and in turn will be perceived as not being at par with
the rest of the world.
Also, it might face the challenge of deflation i.e. the reduced prices are putting
Australia at such a risk, which will mean that companies will leave the market which
is not what the government wants.