A slightly different Australian Federation

Inspired by The Economist magazine’s latest map of the USA with state names replaced by the equivalent nation based on GDP, I felt inspired to do the same for Australia.

The Australian Bureau of Statistics calculates Gross State Products. I converted each to $US using the average exchange rate of (A$1=US0.88) for the period 2009-10.  I then compared them to the latest country GDP calculations from the International Monetary Fund. It throws up some fun replacements:

I draw a number of conclusions from this:

• Victorians should be much more excited by the rarity of our current floods
• The beer in Queensland should be much, much better
• The current economic dramas of New South Wales should be viewed as a likely long-term issue
• Our Olympic sprint coaches should be scouring the Northern Territory
• All future Western Australian tourist campaigns will incorporate Paddington Bear
• We may see South Australia split into two states very soon
• Tasmania is NOT an island, but rather is mountainous (I assume all of Hobart has moved to the top of Mt Wellington) and landlocked…and bordering WA
• Julia Gillard will be delighted that her power has increased, ruling in a Kingdom as she does!

As an aside, I was a little disappointed that, during my stay in the US this year, I’ll be splitting much of my time between Australia and Indonesia!

Update: I have also done this for population now.

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Who’s #2? Who’s #2?

It would be remiss of a blog about International Business to not comment upon a major milestone that occurred (or at least was acknowledged) this week.

China has usurped Japan as the world’s 2nd largest economy behind the US.  This is rightfully being hailed as yet another step on China’s rise to the #1 spot (typically forecast as happening by 2030).

A few issues worth noting:

– This is simply in nominal terms (i.e. converted at prevailing exchange rates).  Allowing for cost of living (what we typically refer to as Purchasing Power Parity) China’s GDP was almost twice as large as Japan already (and about 60% the size of US, rather than the nominal 40% or so)

– There is good reason to believe that these Chinese economy is even larger, with one study estimating the grey economy may add another 30% on top of the official GDP numbers

– A long-term historical perspective would acknowledge this as a “return” to #1 (a rank China has probably occupied more than any other nation-state over human history)

– Putting this all in per capita terms tempers the story considerably, as China struggles to crack the top 100 nations on an income per head basis even when converted to PPP.

This last point is in many ways the most important aspect.  China, and in particular its entrepreneurs, planners, and citizens, isn’t about to slow down in the pursuit of a prosperity.  In the medium-to-long term only India has any real chance of matching the nation for market and labour-force size.  China is already the world’s top exporter, steel-maker and auto market.  The world’s largest multinationals are all scrambling to part of  China’s engagement with each and every aspect of their value chains.