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Austria’s economic relations with the Asia-Pacific region

Asia and the Pacific

Asia (excluding CIS-Asia states)

Asia and the Pacific, which accounts for around 60 percent of the world's population and almost 50 percent of global economic output, is one of the fastest growing regions in the world. In 2023, the Asia-Pacific region maintained this momentum, despite a difficult year for the global economy. According to a forecast by the International Monetary Fund, the region will record growth of 4.5 percent in 2024, contributing around 60 percent to global growth. In addition, its global economic importance continues to grow through political and economic cooperation such as the „Regional Comprehensive Economic Partnership“(RCEP), which came into force in January 2022. This trade agreement includes with Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam 15 states and represents the world's largest trading block, accounting for around one third of global economic output.

With 12.4 percent (+1.2 percent compared to 2022) of total trade in goods in 2023, the Asia-Pacific region remains an important trading partner for the Austrian economy. Imports from the region represented a significant 16 percent of Austria's total, while exports, making up 8.8 percent of the overall volume, also continued to show a positive trend. The most important export markets remain China (2.5 percent of total exports), Japan (0.9 percent), South Korea (0.7 percent), Australia (0.6 percent) and India (0.6 percent). In 2023, an upward trend can be observed in Austrian exports particularly to India (+7.7 percent) and Australia (+4.2 percent) compared to 2022.

Within the region, China holds a special position for the Austrian economy. With imports of goods totaling almost 15 billion Euro and exports of goods totaling 5.1 billion Euro, China is not only Austria's most important trading partner in Asia, but moreover the second most important overseas market overall after the USA.

Within Asia, there is one block that has particularly stood out for its dynamic growth figures in recent years: ASEAN ("Association of Southeast Asian Nations"). After the USA and China, ASEAN is of the European Union’s (EU) largest trading partner outside Europe and is also becoming increasingly important for Austria. Around 1.6 percent of Austria's trade in goods is accounted for by this region. In addition, the Austrian export industry can benefit from trade agreements between the EU and Vietnam and Singapore.

India, Australia and New Zealand should equally not go unmentioned. With growth forecasts of 6.8 percent and 6.5 percent in 2024 and 2025 respectively, India is making a significant contribution to global economic growth. Business opportunities for Austrian companies exist in areas such as industrial modernization, automotive, transport infrastructure, the energy industry and smart cities. In order to promote the internationalization of these domestic companies, tools such as Joint Economic Commissions or diplomatic visits are used, which also serve to strengthen bilateral economic relations. Australia, in turn, was Austria's seventh most important overseas export destination in 2023 after the USA, China, Mexico, Japan, Canada and South Korea. Austrian exports to New Zealand also reflect their popularity with a value of around 182 million Euro.

Further stimulus for economic relations will come from the EU's free trade agreement with New Zealand, which came into force on May 1, 2024. The agreement will reduce existing trade barriers, in particular by almost completely eliminating tariffs on goods (including cars and components, machinery, chemicals, pharmaceuticals, wine, chocolate, cheese) and improving access to services and public procurement. New Zealand's participation in the EU's „Horizon Europe“ research and innovation program was also agreed. According to the European Commission, the free trade agreement is expected to boost bilateral trade by up to 30 percent within a decade. EU exports could increase by up to 4.5 billion Euro annually and EU investments in New Zealand could grow by up to 80 percent. For Austrian companies, the greatest growth opportunities are in the machinery and subcontracting sectors, in plant engineering and construction, and in the food sector.

Further negotiations for EU Free Trade Agreements with countries in the Asia-Pacific region are currently underway with the Philippines (resumed in March 2024), India (resumed in June 2022), Indonesia (resumption in July 2016) and Thailand (since March 2023).

In addition to the economic partnerships, cooperation in the field of well-trained skilled workers from selected Asian countries is also coming to the fore. Therefore, labour agreements have already been signed with the Philippines (2023) and Indonesia (2024) in order to counteract the Austrian skills shortage.

Contact

Asia and the Pacific: wirtschaftsbeziehungen-asien-pazifik@bmaw.gv.at