Tue, May 02, 2017 - Page 11 News List

Chinese investment in Australia surges 11.7 percent: report

Bloomberg

Chinese investment in Australia surged 11.7 percent last year to A$15.4 billion (US$11.5 billion) amid booming demand for agricultural assets and infrastructure, according to a report released yesterday.

A record 103 deals were signed with Chinese companies last year, with 76 percent of those reached with private firms, KPMG and the University of Sydney said in the report Demystifying Chinese Investment in Australia.

Australia, with a population of 24 million people and a land mass larger than India, relies on foreign investment to spur growth.

While Australian Prime Minister Malcolm Turnbull’s government blocked two key purchases by Chinese companies last year, citing national security, the report shows that the vast majority of deals were approved.

“There are signs of a growing maturity by Chinese investors in the Australian market,” the report said in its key findings. “The number of joint ventures is increasing with more repeat investments by established Chinese companies. This has set a foundation for growth in future investment.”

Commercial real estate remained the largest sector, attracting 36 percent of Chinese investment, followed by infrastructure with a record 28 percent, including the purchases of Asciano Ltd and the Port of Melbourne, the report said.

Agribusiness rose threefold from 2015 to more than A$1.2 billion.

While Australia remained second only to the US as the biggest recipient of Chinese capital since 2007, the growth in investment was last year dwarfed by the increase of flows into the EU and Brazil.

Turnbull’s government faces growing calls from fringe populist parties to restrict foreign deals and opinion polls show there is public unease about Chinese investment, particularly from state-run companies, in farmland and other key assets.

Since 2007, Australia has attracted a total of US$90 billion in Chinese investment — second only to the US, the report found.

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