Chinese appetite grows for Australia
Safety scandals are prompting even non-food firms in China to size up agricultural prospects Down Under, with deals expected to flourish
Fears over food safety in China are spurring a growing number and variety of Chinese investments in Australian agriculture.
Tough biosecurity laws and quarantine procedures gave Australia the comparative advantage of clean, safe and plentiful supplies of agricultural assets, said National Australia Bank's David Thorn.
China has been rocked by a series of food safety scandals in recent years, from milk contamination to recycled "gutter" oil. After the death of several children, fears about the quality of infant formula became so great that mainland visitors began buying large quantities of the product in Hong Kong.
Dairy products are one area that offers great prospects. Thorn said many executives of Chinese state-owned food firms expressed interest in investing in Australian dairy production. "The opportunity for Australian dairy producers is massive," he said.
Chinese investment in Australian agriculture has leapt from US$3 million in 2010 to US$20 million in 2011, while US$700 million of potential Chinese investments in Australian agriculture were under discussion in 2011, according to a paper jointly published by the Chinese and Australian governments in December.