Economic Principle for Comparison among Australia and Japan

Question: Discuss about theEconomic Principle for Comparison among Australia and Japan. Answer: Comparison of Economic Condition of China and Japan with Australia Australia is a mixed market economy with 1.8% growth rate in 2016. Service sector is holds major share in the economy of Australia. Mining sector has significant contribution in the GDP, and employment of the economy. Inflation rate is strictly controlled by the Reserve Bank of Australia and is kept around 2%. Unemployment rate is high in this country. On the other hand, Japan and China are rapidly expanding economies in the world economy. Japan is fourth largest country in the world in terms of purchasing power. Technological development, automobile manufacturing industry is main driver behind economic growth of Japan. Japan generally runs trade surplus compared to other advanced nations. Economic outlook of this country is stable compared to other developed and developing nations. China is the second largest GDP in terms of GDP. Manufacturing industry is the main driver of the economic growth of this country. It can be seen that global financial crisis and global economic slowdown has negatively affected the economy of China as Chinese economy is related to other economies through global trade, where as Australian economy has been remain relatively less affected by global financial crisis (weforum.org, 2016). China is fastest growing consumer market compared to Australia and Japan. Similar and Different Trends Figure 1: Comparison of GDP (Source: data.worldbank.org, 2017) China and Australia has started with similar level of GDP during 1990. However, during 1990s, Australian economy experienced recession and stock market collapse to slow the economic growth. During 1990-2004, Australian economy has grew only at the rate of around 1.7% (Data.worldbank.org, 2017). Chinese government emphasised on investment and industrial policy. The common aspect between China and Japan economy is development of manufacturing sector, where as Australian economy shifted towards service sector. Use of domestic resources, internal capital formation have important factor for the economic growth of China and Japan. Chinese economy surpassed Japanese economy in terms of GDP after 2009. Influencing Factors on the Economic Growth of the Nations Along with domestic resources, there are other factors such as development of human capital, depletion of natural resources, technological development are the factors for economic growth. Moreover, political stability, trade relations with other regional and global economies, capital flows, domestic infrastructure supporting for industrial and social development are necessary factors influencing the growth of the economy (weforum.org, 2016). Along with these factors domestic fiscal and monetary policies play important role in this context to boost up investment through change in interest rate, taxation. References Data.worldbank.org. (2017). GDP (current US$) | Data. Retrieved 24 May 2017, from https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=AUview=chart weforum.org (2016). The Global Competitiveness Report 20162017 https://www3.weforum.org/docs/GCR2016-2017/05FullReport/TheGlobalCompetitivenessReport2016-2017_FINAL.pdf