China accelerates overseas food investment as safety scares hit
China's food safety concerns are accelerating the country's overseas investment in food and beverage companies and agriculture.
Chinese outbound direct investment in agriculture and technology has increased sharply over the past few years, according to Ernst & Young.
It represented 15 per cent of all Chinese outbound direct investment in the first half of this year compared with 4 per cent in 2009.
The value of major Chinese outbound merger and acquisition in food and agriculture exceeded US$9 billion from 2010 to September this year, according to an estimate by the Economist Intelligence Unit (EIU).
National Australia Bank, which describes itself as Australia's biggest "agri-business" bank, is involved in several potential Chinese investments in Australian agriculture and food, said the Asia head of institutional banking, David Thorn.
"There are many opportunities we have at the moment for Chinese investment in Australian agriculture," Thorn said.
"Demand for safe and nutritious food will rise dramatically across the Asia-Pacific region as purchasing power increases.
"China's food and agriculture giants will play an increasingly larger role as far as food safety and security is concerned, not only in China but across Asia."
China's food imports will jump about sevenfold to US$360 billion in 2050 from about US$50 billion in 2007, according to the Australian Department of Agriculture, Fisheries and Forestry.
Outbound Chinese investments in agriculture would keep growing at the same pace as the past few years or even increase, said Laurel West, Asia director of industry and management research at EIU.
Globally, mergers and acquisitions in the food and beverage sector leapt 117 per cent to US$194.6 billion last year, Thorn said.