3. Austria's economic situation
(1) Endowment of economic resources
Austria ’s mineral resources mainly include graphite, magnesium, lignite, iron, oil, and natural gas. Rich forest and water resources. The forest coverage rate is 47.6%, there are 4 million hectares of forest farms, and the wood accumulation is about 1.135 billion cubic meters.
(2) Macroeconomic conditions
In 2017, the Austrian economy developed steadily, with a year-on-year growth rate of 2.9%, a slight increase in total foreign trade, and an unemployment rate that fell 0.7% from the previous year, but the national debt ratio still exceeded EU standards. In terms of policies, there will be no major changes in Austria's fiscal, monetary, tax, environmental protection, and resource policies. In the labor system, the Austrian government introduced red, white, and red cards (the period of red, white, and red cards is generally 12 months. It allows skilled immigrants to legally stay in Austria and work for fixed employers within this period, and holds red, white, and red cards. After the year, there is an opportunity to apply for advanced red, white, and red cards or permanent residence) to promote high-tech and talents who are in short supply to work in Austria and to solve the problems of the aging population and lack of professional talents in certain categories. Thanks to good social partnership, strikes, and other incidents rarely occur in Austria.
According to data published by the World Bank, Austria ’s per capita GDP in 2017 was US $ 45,000. The Austrian economy relies heavily on the external environment, and the European economic recovery has driven the Austrian economy to improve. The Austrian economic and trade structure has the obvious "two-headed eagle" characteristic. On the one hand, Germany, as Austria ’s largest trading and investment partner, has an important economic impact on the Austrian economy. On the other hand, Austria has close economic ties with Central and Eastern European countries. Eastern Europe has a lot of investment and loans, and these countries are also important export markets for Austria. The economic performance of these countries has also become an important factor affecting the Austrian economy.
Composition of GDP
In 2017, Austria ’s GDP accounted for 72.6% of consumption, investment accounted for 23.5%, and export surplus accounted for 3.8%. Austria ’s consumption has remained stable for a long time, and it has not been greatly affected even during the economic crisis. In addition, the government has taken measures to increase residents ’income, making consumption an important factor in maintaining economic stability. The Austrian economy is highly dependent on foreign trade. In the event of an economic crisis, exports have declined, manufacturing has suffered, and economic growth has slowed. After the improvement of the overall international economic environment, the first thing that drives economic recovery is exports and consumption. In 2017, Austrian exports of goods rose sharply by 7.6%, while consumption remained basically stable over the same period. The European Union, Central and Eastern European countries, the United States and China are Austria ’s most important export markets.Industrial structure
The service industry occupies an important position in the Austrian economy. In 2017, the tertiary industry accounted for 70.5% of Austria ’s GDP, the secondary industry accounted for 28.30%, and the primary industry accounted for only 1.2%. Compared with other developed economies, Austria has a relatively high proportion of industry and a moderate proportion of services. This economic structure is considered to have a strong ability to withstand crises. In the course of the financial crisis and economic recession, the Austrian economy has shown a strong ability to resist risks, and in the process of economic recovery, it has also performed better than most other EU member states.Fiscal revenue and expenditure
In 2017, the Austrian government ’s fiscal revenue was 178.6 billion euros, an increase of 2.7%, and fiscal expenditure was 181.2 billion euros, an increase of 1.27%. The fiscal deficit is 2.6 billion euros, accounting for 0.7% of GDP, which is a significant decrease from 1.6% in 2016. In 2018, Austria has again achieved a zero deficit since 1974 and generated a public surplus of 426 million euros, accounting for 0.1% of gross domestic product (GDP). The realization of the zero deficit is mainly due to the good economic performance, the creation of a very good income, and the improvement of the employment situation and the low unemployment rate. In addition, low-interest rates and government spending cuts have also had a positive impact.Unemployment rate
According to the latest data from the Austrian Statistics Bureau, the number of unemployed persons in Austria was 220,000 in 2018, and the unemployment rate fell from 5.5% to 4.9%. The total number of employed people is 4.3 million, of which 465,000 are independent workers and 3.8 million are non-independent workers, an increase of 67,400.Public Debt
As of the end of 2017, Austria ’s public debt was 289.5 billion euros, accounting for 78.4% of GDP, significantly higher than the EU ’s 60% requirement.Foreign Exchange Reserve
According to the statistics of the Austrian Central Bank, Austria ’s official reserve assets in 2017 were about 32 billion euros, of which 8.3 billion euros were foreign exchange reserves.Inflation
According to the Austrian Statistics Agency, the inflation rate in Austria in 2017 was 2.1%.Sovereign Debt and Rating of Financial Institutions
The proportion of fiscal deficit to GDP remains below 3% of the "EU Stability and Development Convention", and the debt ratio far exceeds the standards stipulated by the Convention.(3) Advantageous resources/industry
Austria ’s industrial and service industries are quite mature and have some advantageous industries. According to the statistics of the Austrian Statistics Bureau, in 2017 Austria had a total of 64,655 manufacturing and construction companies, with 968,000 employees and sales of 266.1 billion euros. The most important industrial sectors in Austria are the machinery industry, the chemical industry, the food and beverage industry, the metal processing industry, and the automotive industry.
Machinery Industry
Including metal processing, machinery and equipment manufacturing, it is Austria's largest advantageous industry, with about 8,600 enterprises, and its output value accounts for 1/4 of Austrian industrial output value. Annual investment in research and development exceeds 700 million euros. Special machinery, customized machinery and boiler construction are the core competitiveness of the Austrian machinery industry.Chemical Industry
In 2016, there were 245 chemical companies in Austria with 44,000 employees and an annual turnover of about 20 billion euros, accounting for 13% of the total output value of the Austrian Industry and 70% of its products are exported. Well-known companies include the regional headquarters of Nordic Chemical, Lenzing and BASF, Henkel, and other multinational companies established in Austria.Energy and environmental protection industry
Austria regards energy and environmental technology as its strategic focus for research and development and has outstanding technical advantages in the fields of biomass energy utilization, solar energy utilization, future construction and industrial utilization of renewable raw materials. Clustering is the main feature of this industry. There are 6 major ecological industrial clusters, namely Styria Green World (EcoWorld), Upper Austria Ecological Energy Industry Group (OEC) and Environmental Technology Industry Group (UC), Lower Austria Green Building Industry Group, Burgenland Water Industry cluster (water supply and sewage treatment) and Tyrol ’s energy industry cluster, among which EcoWorld and OEC are the most representative, and also enjoy a high international reputation, with more than 800 affiliated companies.Automotive Industry
There are about 700 companies with 150,000 to 200,000 employees and an annual turnover of about 25 billion euros. Together with related industries and services, the total employment is 370,000. About 1.8 million engines and transmissions are produced each year, and almost all products are exported abroad. The BMW engine plant in Steyr is the largest engine plant of the BMW Group, where about 70% of BMW and 25% of MINI engines in the world are produced. In the electrical and electronics industry, Austria is world-renowned for its high-quality electronic products such as chips and integrated circuits (such as chips and integrated circuit products for airbags, anti-lock braking systems, Airbus or high-speed trains). Famous companies include AVL Liszt Internal Combustion Engine and Test Equipment Company, Rosenbauer fire trucks, Palfinger hydraulic lift trucks. Austria ’s three largest automotive industry clusters are located in Upper Austria, Styria and Vienna, of which the Upper Austrian automotive industry cluster has 215 members.
Bio and Medical Technology
The Austrian health industry has a long history. Pharmaceuticals, medical equipment, medical laboratory technology and equipment, and biotechnology are developed. The development and production of medical equipment, hospital facilities, home rehabilitation, and auxiliary equipment are Austria's advantageous industries. Among them, the representative is VAMED, which exports a large amount of medical equipment and facilities to many countries in the world every year. In recent years, Austria has also made rapid progress in the development of biopharmaceuticals and biotechnology. Well-known enterprises and fund investments in the United States, Switzerland, and other countries have established a number of subsidiaries to lead the development of biotechnology in Austria.Tourism
Austria ’s tourism industry is well-developed and is a pillar industry in the service industry. According to the statistics of the Austrian Bureau of Statistics, as of 2017, there were 64,830 hotels and inns in Austria, with a total of about 1.1 million beds. In the same year, about 42 million tourists were received, and the number of overnight stays reached 144 million, with an average stay of 3.4 days.Since 2008, the number of Chinese tourists staying in Vienna has increased by 5 times, driving hotel turnover by more than 6 times. In 2017, the number of Chinese tourists staying overnight in Vienna reached 440,000, a year-on-year increase of 34%. China has become Vienna's seventh-largest source market. During President Austria ’s visit to China, Hainan Airlines announced that it will open direct flights from Shenzhen to Vienna twice a week from October 2018. On June 18, 2019, China Southern Airlines will open the Guangzhou-Urumqi-Vienna route.
Aviation Industry
In 2017, the acquisition of Austrian Diamond Aircraft Company by Wanfeng Aviation Industry Co., Ltd., a subsidiary of China Wanfeng Auto Holding Group, was the largest acquisition.
(4) Absorption of foreign capital
Investment attraction
Austria is located in the center of Europe and is a bridge between the East and West European trade fairs and communication. Austria is favored by foreign investors for its unique geographical location. Austria has a stable society, stable political situation, sound laws, good public order, convenient transportation, perfect infrastructure, high-quality professionals and workforce, a high-quality social service system, and a beautiful living environment. Since the 1990s, Austria has gradually become one of the most attractive countries for investment in Europe.According to the 2017-2018 Global Competitiveness Report of the World Economic Forum, Austria ranks 18th among the 137 most competitive countries and regions in the world. According to the "Business Environment Report 2018" released by the World Bank, Austria ranks 22nd in business convenience in 190 countries and regions.
A research report commissioned by a professional consulting company commissioned by the Austrian Federal Investment Promotion Agency shows that there are several main factors for foreign companies to choose Austria as an investment destination (note: the value in parentheses indicates the proportion of companies participating in the survey)
(1) Close to the target market (90%). The geographical proximity of Austria to emerging markets in Eastern and South-Eastern Europe is unmatched by other Western European industrialized countries. It is directly adjacent to four Eastern European countries and can take up to an hour's flight journey from Warsaw, Prague, and Budapest.
(2) Infrastructure (61%). Excellent logistics and communication infrastructure makes the rapid circulation of goods and information possible. The Austrian banking and management consulting industry has long had extensive connections and competitiveness in the Eastern European business community.
(3) Productivity and motivation (39%). Austria is one of the most productive countries in the world.
(4) Stability (28%). There are very few strikes in Austria, with a high degree of personal security and a stable legal protection system, which provides investors with a stable guarantee for successful business activities in risk markets.
(5) Preferential taxation system (11%). Austria offers very attractive tax policies for holding companies.
(6) Quality of life (39%). Vienna is one of the most popular business destinations in the world.
Investment of foreign capital
More and more international multinational companies choose Austria as their headquarters for operating the Central and Eastern European markets. Some 300 multinational companies have established regional headquarters in Central and Eastern Europe in Austria, including 28 of the world's top 500 companies. More than 1,000 international companies use Austria as a springboard to new Eastern Europe. Two-thirds of American companies in Austria coordinate their business activities in neighboring Central and Eastern European countries from here.According to the statistics of the Austrian Central Bank, the countries with the most investment in Austria are the Netherlands, France, Luxembourg, and Germany. According to statistics released by the Austrian National Investment Promotion Agency (ABA), in 2017, foreign companies invested 344 projects in Austria, with a total investment of 724 million euros, creating 2,672 jobs. According to the 2018 World Investment Report released by UNCTAD, in 2017, Austria ’s foreign investment flow was 9.63 billion U.S. dollars; by the end of 2017, Austria ’s foreign investment stock was 185.198 billion U.S. dollars.
(5) Foreign trade
Austria implements a unified EU foreign economic and trade policy. The vast majority of Austria ’s foreign trade is intra-EU trade. According to the statistics of the Austrian Bureau of Statistics, EU member states accounted for 70.27% of Austria ’s imports and 69.7% of exports in 2017; the entire European market accounted for 81% of Austria ’s imports and 79.4% of exports; Asian countries accounted for 13% of Austria ’s imports and 9.1% of exports The Americas account for 5.2% of Austria ’s imports and 9.5% of exports; African countries account for 1.1% of Austria ’s imports and 1.4% of exports. Overall, in Austria's imports and exports, the proportion of all continents has remained basically stable, and the proportion of Asian countries has increased slightly.
Trade Scale
According to the statistics of the Austrian Statistics Bureau, the total volume of imports and exports of Austrian goods in 2017 was 289.5 billion euros, a year-on-year increase of 8.3%. Among them, exports were 141.91 billion euros, an increase of 8.1% year-on-year, and imports were 147.65 billion euros, an increase of 8.8% year-on-year. The annual trade deficit was 5.7 billion euros. In 2018, the import and export volume of Austrian goods trade exceeded 300 billion euros for the first time. Among them, imports were 155.71 billion euros, up 5.5% over the previous year, and exports were 150 billion euros, up 5.7%. The deficit was 5.71 billion euros, slightly higher than last year's 5.6 billion euros. After working day adjustments, imports increased by 5.5% and exports increased by 5.4%.Trade Partners
Austria ’s main trading partners are EU member states, and about 70% of its foreign trade is carried out with EU member states, of which Germany, Italy, and other countries are the most important trading partner countries. Outside the EU, Switzerland is its largest trading partner. The top four trading partners in 2018 are Germany (100.9 billion euros, 33%), Italy (19.7 billion euros, 6.4%), the United States (16.6 billion euros, 5.4%) and Switzerland (13.8 billion euros), Accounting for 4.5%). Outside Europe, the United States is its most important trading partner. Since 2015, the United States ranks second in the Austrian export market. The growth of Austrian exports to the United States is much higher than the average, reaching 9.7% in 2018, which exceeded the 10 billion euro mark for the first time, while imports accounted for only about 60% of exports. Machinery and vehicles, processed products, chemicals, and other finished products are the main products exported to the United States, which together account for about 90% of exports to the United States.Commodity Structure
According to the statistics of the Austrian Statistics Bureau, machinery and transportation equipment, other manufactured products, and chemical products are Austria ’s main exports, accounting for 75% of Austria ’s total exports in 2016. Machinery and vehicles, processed products, and other manufactured products are the top three products imported by Austria, accounting for 66.7% of Austria ’s total imports.(6) Financial environment
Local Currency
The general currency of Austria is the Euro. RMB and the Euro cannot be settled directly.Foreign Exchange Management
Austria is a country in the euro area and one of the first countries to use the euro in 2002. It implements the same foreign exchange management policies of the EU and the euro area countries. A foreign-funded enterprise can open a local bank account after registering in Austria. Austria implements a free exchange system for foreign exchange, and businesses and individuals can freely hold and trade foreign exchange. In principle, Austria has no restrictions on the import and export of foreign exchange, but in recent years, due to the increased efforts to combat money laundering, in many cases, remitters are required to submit proof of the use of funds and legal sources. Passengers are obliged to declare if they carry cash equivalent to 10,000 Euros or more at the Austrian airport. The customs has the right to monitor natural persons, luggage and vehicles in accordance with relevant regulations and confiscate undeclared cash. Enterprises need to withhold a 25% income tax when they remit profits. According to the agreement between the governments of the two countries to avoid double taxation and the provisions of local tax laws, companies can go to the Austrian Taxation Bureau to apply for an 18% tax refund, that is, 7% actually paid.Banks and Insurance Companies
Austria's banking system is very sound, and it has a great impact on the surrounding countries in Central and Southeastern Europe. It has extensive financial cooperation with these countries. Austria ’s “Bank Secrecy Act” is well-known in Europe and Switzerland, Luxembourg, etc., and provides good bank services. Austria ’s financial laws are very strict and have a reputation internationally. However, according to the EU's new interest tax directive, Austria will reform the existing bank secrecy system in 2017 and implement a system for exchanging foreign depositor information with other EU member states, while Austrian domestic depositors will not be affected by this.The Austrian Central Bank is a member of the European Central Bank and the Euro system. According to the "Austrian Central Bank Law" promulgated in 1984, the central bank was established in the form of a joint-stock company. 70% of the 12 million euros in basic funds are owned by the state, and the remaining 30% is held by banks, insurance companies, and other institutions. Its basic function is to maintain the stability of monetary policy in the euro area, guarantee the stability of Austrian finance and provide a high-quality and stable currency for Austrian nationals and the national economy. In addition, the central bank is also responsible for the country's gold and foreign exchange reserves and provides economic development forecasts and some statistical work. The main commercial banks in Austria include the First Bank (Erste Group), the Central Cooperative Bank (RZB), and the BAWAG Bank. In June 2015, Austria officially joined the Asian Infrastructure Investment Banking Agreement.
