In March, I had the opportunity to visit Australia for the first time, meeting with a client as well as a finance professor colleague. During this time, I observed the vast country’s unique economic and financial dichotomies. As large an area as the continental U.S., Australia is also the second most sparsely populated country in the world, second only to Mongolia. There are only 21.8 million people in the entire country – not much more than the New York City metro area.

Although small in population, Australia has certainly exerted its influence on the world stage and is rapidly becoming an economic player. When the Great Recession hit the U.S. and other developed countries in 2008-09, Australia emerged largely unscathed. Its housing market didn’t correct during the crash and is now showing signs of frothiness. The labor market is so red hot that the government is talking about importing workers to fill labor shortages in its mining industry, although other sectors—construction, manufacturing and agriculture—are weakening.

Overall, business in Australia is running at two speeds. Large businesses, especially those connected to export industries, are running on high, while small and medium-sized businesses are more at a slow idle. The country is performing very well on a global scale, aided by the fact that Australian firms with international operations can do more than smaller firms to protect against the rising Australian dollar.

The country has very low unemployment, just 4.9 percent in March (compared to 9 percent in the U.S in April). The Australian Treasury projects 500,000 new jobs will be created in the next four years, but private economists predict Australia will need more than 2 million new jobs by 2015, a sign the government number is likely undercounting.

With its proximity to Asia, Australia’s relationship with the continent is mixed. While 25 percent of exports go to China, foreign investment in an Australian company of more than 15 percent for an individual or 40 percent for a group requires government approval before it can go forward. While this is not a regulation specific to China, it does exemplify the cautious nature and concern of keeping Australian resources in Australian hands.

Australia’s two largest mining companies, BHP Billiton and Rio Tinto, have a contentious relationship, especially when it comes to China. Rio Tinto has been very friendly towards China, with CEO Tom Albanese publicly praising the country as a great place to do business, perhaps an attempt to patch the strained relationship after a Rio Tinto employee and Australian citizen was charged with corporate espionage. In contrast, BHP Billiton’s relationship with China has been frosty for years, with CEO Marius Kloppers saying in 2009 (via Wikileaks), “Australia does not want to be an open pit in the southernmost province of China.”

With its thriving economy, bustling international marketplace and engagement of modern trade issues, Australia is proving itself a major pacesetter in today’s global economy.

Emily Sanders is president, founder & CEO of Sanders Financial Management. She visited Australia for a vacation and to conduct investment research. She can be reached at