[FONT=Times New Roman]This research is outlined as follows: Part II reviews PPP literature, in which the subsection 1 on PPP theoretical background highlights the law of one price and the role of international trade as crucial conditions for the existence of the parity condition. An overall picture about extant empirical literatures on PPP including Australian evidences is provided in subsection 2 and 3. From these reviews we develop our arguments about the impacts of trade and investment on the PPP s between Australia and its trading partners. Part III presents the hypothesis our research and the methodologies, models we use to test the hypothesis in details. Part IV describes and discuss about the data used in our research. The results of this research are reported and discussed in Part V. Conclusion is provided in Part VI; and Part VII proposes some direction for future research