Chinese investment in Australia plunges

Chinese investment in Australia collapsed by more than 61 per cent in 2020, according to new figures from the Australian National University (ANU).

This followed a 47 per cent fall in 2019 and is the lowest number recorded over the past six years.

The ANU Chinese Investment in Australia Database (CHIIA) recorded just over $1 billion of investment in 2020, down from $2.6 billion the year before and well short of the peak of $16.5 billion recorded in 2016.

READ MORE: Fears for future of rock lobster fishing industry as China ban bites

The number of Chinese investments recorded was only 20, well down from a peak of 111 investment projects five years ago.

"It reflects the effects of COVID but also more scrutiny of foreign investment by the Australian government, particularly that from China."

The Federal Government announced an overhaul of its foreign investment laws in 2020 to give it the power to veto, or force the sale of a business if it created a national security risk.

In 2020, a huge 86 per cent of Chinese investment in Australia originated from Chinese companies already established in Australia.

This means purchases were made through Australian subsidiaries rather than by foreign firms directly.

Dr Shiro Armstrong, director of the East Asian Bureau of Economic Research where CHIIA is based, said this is a pattern that intensified in 2019 when 91 per cent of new Chinese investment was sourced from within Australia.

READ MORE: Farmers warn China trade dispute will cost them $37 billion

"In 2020, the year of COVID-19, foreign direct investment fell globally by 42 per cent according to the United Nations," Dr Armstrong said.

"UN data is measured differently, but the fall in Chinese investment to Australia was much larger."

Since last year Canberra and Beijing have been embroiled in diplomatic and trade disputes.

Australian beef, barley, coal and wine producers have been targeted with sanctions after clashes over the coronavirus, Hong Kong and foreign interference.

Source: https://ift.tt/3stdOoq