This means each year we see inflows of foreign investment to make up the gap.
While the majority of foreign investment in Australia continues to be held by the United States and the United Kingdom, China has recently emerged as a significant new source of investment.
Chinese investment in Australia quadrupled in value between 2010 ($A19 billion) and 2016 ($A87 billion).
Importantly, the majority of new Chinese investment is in services and consumption-led activities such as health, tourism and agribusiness, assisting Australia in its transition to towards broader sources of growth.
When an overseas investor commits capital in the form of direct investment they typically do so because they see an opportunity to unlock unrealised value in the business.
• Better linking the business into global supply chains or international markets not currently accessed by the business;
• Bringing strong management, industry, or technological ‘know-how’ to a business which allows it to realise greater value from its current operations; or
• Injecting capital which allows a business to efficiently and quickly scale up to meet growing demand for its output.