More than one out of every four dollars invested in Australia from overseas comes from the United States, 12 times higher than the investment from China, according to new research from the United States Studies Centre. Yet despite this, polling data found that 71 per cent of Australians incorrectly believe China is the top investor into the country.

This latest research builds on the groundbreaking analysis of the 2017 report Indispensable Economic Partners. Authored by USSC Non-Resident Fellow David Uren and featuring analysis by Trade and Investment Program Director Dr Stephen Kirchner, Enduring Partners: The US-Australia investment relationship examines the stunning growth of US and Australian two-way investment at a time when foreign investment in developed countries has dropped by 50 per cent.

"Since the Australia-United States Free Trade Agreement went into effect on 1 January 2005, the value of the Australia-US investment relationship has nearly tripled, adding more than $1.2 trillion," USSC CEO Professor Simon Jackman says.

He continues, “In 2017 we described the United States and Australia as 'indispensable' economic partners. We now add 'durable' and 'resilient' to that characterisation."

The report also examines the significant shift since 2017 in both the uptick in an “America First” approach to business and investment as well as the role of national security in influencing foreign investment.

USSC Director of Trade and Investment and report co-author Stephen Kirchner notes, “We thought we were facing uncertain times in 2017 when we released our first report. Uncertainty has only increased since then, making a deeper understanding of the bilateral investment relationship even more imperative.

"The COVID-19 pandemic has dramatised the benefits of economic integration by showing us what happens when these benefits are lost. Public policy will need to re-establish and then build upon these international connections, including ensuring that Australia remains an attractive destination for foreign capital. As our most important investment partner, US investment effectively benchmarks that attractiveness.”

Kirchner concludes, “The bilateral investment relationship complements the diplomatic and security relationship with the US at a time when the region is facing growing economic and other forms of coercion from China.”

Enduring partners: The US-Australia investment relationship is now available for download.

To book a briefing with report author David Uren, please email us at: us-studies@sydney.edu.au

Key points

  • More than one out of every four dollars invested in Australia from overseas comes from the United States, with the US investment in Australia totalling $984 billion.
  • The US-Australian investment relationship has grown to $1.82 trillion, is $627 billion more than Australia’s investment relationship with the United Kingdom, Australia’s second-largest investment partner, and is ten times larger than Australia’s bilateral investment relationship with China
  • 71 per cent of Australians incorrectly think China is the top investor into Australia, while only 17 per cent of Australians correctly say the top investor is the US.
  • The value of the two-way US-Australia investment partnership has reached $1.82 trillion, which is equivalent to about 90 per cent of the value of the entire Australian share market.
  • US-owned firms in Australia contribute some 323,000 jobs to the market, with annual salaries averaging more than $100,000.

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Taylor Mellor
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taylor.mellor@sydney.edu.au