According to The Australian Financial Review, Australia and Japan have been among the global front runners in managing the COVID-19 health crisis and are positioned to lead the lifting of economic restrictions and the economic global recovery if they can contain second-wave outbreaks of the pandemic.
A virtual summit on Thursday between the two countries' prime ministers, Scott Morrison and Shinzo Abe, provides a chance to deepen the bilateral relationship and signal a commitment to broader regional cooperation that can help improve outcomes in the post-COVID-19 world.
Japan is Australia’s second-largest trading partner, with $88.5 billion in two-way goods and services trade that accounts for roughly 10 per cent of Australia’s total trade. It is the second-largest source of foreign direct investment in Australia, creating jobs, trade links and increasing asset values. Many famous Japanese brands sold in Australia are shipped from Australia’s largest trading partner, China, and Japanese businesses in Australia sell actively into the Chinese market.
Australia matters for Japan by underpinning its economic security as the supplier of close to two-thirds of its resource imports such as iron ore and a quarter of its energy imports, and is by far the largest single source of these strategic raw materials. Japan relies on imports for almost all its resource supplies and 90 per cent of its energy needs.
As Japan shifts its energy mix away from oil to gas, Australia has become strategically more important to that country compared with the Middle East.
Co-operation in hydrogen energy is already growing rapidly and the expansion of renewable energy in Japan is an opportunity for Australia to become a more important energy partner because of its huge natural endowments.
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