Rapid growth in emerging Asia over the last decade has had a significant impact on the world economy. With that growth skewed toward the export sector, the import of competitively priced goods from emerging Asia has helped inflation in tradable goods prices low. On the other hand, the increase in demand for raw materials associated with this rapid growth has also been a factor raising commodity prices. Australia has been uniquely positioned to benefit from both of these developments and its terms of trade have improved to record highs. With a relatively small manufactured goods sector, Australia has long relied on imported manufactured goods and competitively priced goods from emerging Asia have become a significant share of imports in Australia. In addition, Australia’s endowment of key commodities heavily demanded by emerging Asia has buoyed export volumes and notably increased export incomes.