Australia has a lot of foreign businesses and it has a lot of immigrants. Both earn Australian dollars and huge amounts would be sent back their country of origin.

His does Australia balance its books on something like this? How do the economics of it work? Would it lower Australian inflation but shortening the money supply, and raise inflation of the destination country as it prints more money to exchange the Australian dollar?

  • purahna
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    1 year ago

    Money flowing out in the two routes you mentioned is peanuts compared to the money flowing in: finished goods being purchased in bulk at a lower price and then being sold at a higher price. Or alternately for foreign owned businesses, goods being manufactured remotely for very cheap, where Australian corporations can employ near-slave labor and ignore environmental regulations and then said goods are brought home and sold very expensively relative to their production costs. In both cases, the owners of the corporation are able to take a large slice of the finished value of the goods despite them being made by others elsewhere.

      • purahna
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        1 year ago

        A huge deal of China’s emissions come from it being the workshop of the world, yes. So in a way, a big quantity of China’s emissions are western goods to be used and sold in western countries that western companies profit off of, who’s production emissions get chalked up to China.