Foreign Direct Investment Inflows
Australia remains the largest market for mergers and acquisitions (M&As) in the Asia Pacific. As in other developed countries, cross-border M&As account for a significant share of foreign direct investment (FDI) in Australia. The total value of cross-border M&A sales hosted by Australia in 2006 was US$16.4 billion.
Foreign direct investment in Australia totalled US$24 billion in 2006 which was greater than inflows into the major regional economies of Japan, Korea, Indonesia and India.
Major labour market and business taxation reforms, together with deregulation of industries such as finance, telecommunications and utilities, have helped attract foreign direct investment to Australia. The growth in Australia's economy and stock market has also lured considerable overseas capital to Australia. Multinational enterprises already in Australia continue to make further investments, as well as partnering with Australian small and medium sized enterprises and research institutions.
The outlook for FDI in Australia is strong, with factors such as a resilient domestic economy, strong company earnings, and buoyant commodity prices adding to Australia's attractiveness as a destination for foreign investment.
Foreign Direct Investment (FDI) Inflows and Cross-Border Merger and Acquisition (M&A) Sales by Host Economy, 2006 (1)
| Economy |
FDI US$ million 2006 |
M&A sales US$ million 2006 |
| Australia |
24,022 |
16,391 |
| Hong Kong SAR |
42,892 |
9,472 |
| China |
69,468 |
12,811 |
| Indonesia |
5,556 |
554 |
| Korea |
4,950 |
2,772 |
| Singapore |
24,207 |
7,303 |
| India |
16,881 |
6,716 |
| New Zealand |
8,055 |
4,836 |
| Japan |
-6,506 |
2,599 |
| Malaysia |
6,060 |
2,811 |
| Taiwan |
7,424 |
5,672 |
| Thailand |
9,751 |
4,314 |
| Philippines |
2,345 |
160 |
Footnotes:
1: Merger and Acquisition (M&A) sales are expressed as the total transaction amount of particular deals at the time of closure, not at the time of announcement. Only deals involving the acquisition of an equity stake of more than 10% by the home entity in the host entity are counted. The M&A values are not necessarily paid out in a single year.
2: The reincorporation of News Corporation from Australia to the United States, which was completed in November 2004, accounts for the adjustment in FDI in 2005.
Source: UNCTAD World Investment Report, 2006 and 2007.