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China and Australia maintained a good international relation in terms of trade and investment. Economic growth in China propelled since 1970. The economic growth has brought growth in different sectors including manufacturing, infrastructure and smoothen the path of economic urbanization. Along with demand has created for different raw materials, energy demand for transport and electricity and other building materials for manufacturing. Since then Australia is in a well position to meet the demand for the emerging economies. China is regarded as the largest exporter and importer of Australia. A significant investment relation is also hold between the two nations. In the new growth phase the drivers of economic growth has also changed. The driving factor of growth has transformed from manufacturing led growth to a shift towards production of a complex goods and services. This moderates Australia’s resource demand. There is a transformation of China’s demand from an earlier demand of raw materials to a broader demand of service, manufacturing and expertise. Investment decision in any country depends on the macroeconomic environment of the country of interest. Macroeconomic environment is a broad spectrum. There is no single indicator for reflecting overall macro environment. Rather a number of different aspects needs to be evaluated. First important aspect that needs to be considered in the prevailing business environment of the country. A favorable business environment include aspects such as method of dealing to obtain permit for construction, advantages of property rights, credit facilities, protection of the interests of small investors
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