Chinese investment in Australia plummets as tensions spiral
- Chinese investment Down Under plunged from US$3.5 billion to just US$1.8 billion last year
- Beijing-Canberra relations have nosedived in recent months after a series of diplomatic clashes, with China imposing tariffs on Australian products
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Researchers from the Australian National University said Chinese investment Down Under plunged from Aus$4.8 billion (US$3.5 billion) to just Aus$2.5 billion (US$1.8 billion) last year.
Professor Peter Drysdale, who led the data research, said the Aus$1.43 billion purchase of infant formula producer Bellamy’s Australia by China’s Mengniu Dairy accounted for more than half of that investment.
It was the third consecutive year that Chinese investment in Australia dropped since peaking at Aus$15.8 billion in 2016.
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The steep fall far outpaced a global decline in China’s overseas ventures of 9.8 per cent last year, reflecting the bilateral political tensions, Drysdale said.
“(In) the last few years, clearly Chinese investors have found the investment environment in Australia less certain and have been more cautious about undertaking investment in Australia,” he said.
In June, Australia announced tougher measures to block or overturn new foreign investments deemed to compromise national security – a move widely viewed as an effort to limit growing Chinese influence.
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Drysdale said structural changes were also partly to blame, with Chinese investors retreating from mining and resources as the commodity boom weakened.
While Chinese investment in Australian real estate and agriculture also fell in 2019, the ANU researchers found some “modest gains” in the construction, education and finance sectors.
Drysdale said it was important for Australia to consider how to reverse the “continuing downward trend” due to the key role of foreign investment in supporting economic growth and trade.
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“Whether that can be changed quickly or not is another question altogether because it very much depends on how purposeful (an) approach there is to mending the relationship between the two countries,” he said.
Sino-Australian relations have nosedived in recent months after a series of diplomatic clashes.
