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Friday, March 29, 2024

China investment cut by half

Chinese investment in Australia dropped by over 47%, from $4.8 billion in 2018 to $2.5 billion in 2019, according to new data released by The Australian National University’s Chinese Investment in Australia (CHIIA) database.

The level of Chinese investment in Australia has fallen for three consecutive years since it peaked at $15.8 billion in 2016, the CHIIA database has shown.

The database has tracked Chinese direct investment into Australia for the calendar years 2014 to 2019, showing a total of $49.3 billion worth of investment was made by 361 Chinese investment projects in Australia over that time.

According to the data, over the six-year period, the real estate sector received the biggest proportion with 24% of Chinese investment, followed by the mining sector that made up 21% of the total value.

There has also been an increase in the share of private investments in total investment from China.

A team at ANU has been working with the Australian Treasury and other government departments to create the new Chinese investment data series that provides a level of detail by industrial sector and investor activity not previously available.

It says the 2019 decline in investment coincided with lower flows of Chinese investment abroad but the fall in flows to Australia was sharper.

Project leader Professor Peter Drysdale said: “An important characteristic of the CHIIA database is its public nature and its verifiability.

“The transparency of the database makes it useful for detailed enquiries and the tracking of particular investments in Australia. This kind of data is not available from other foreign investment databases in Australia.”

In 2019, Chinese investment almost halved across all sectors, with major falls in mining, real estate and commercial property, manufacturing and a collapse of investment in agriculture. There were some modest gains in construction, education and finance.

In 2019, Chinese foreign direct investment dropped globally by 9.8%.

The research team noted “the much sharper decline” in Chinese investment in Australia may have been associated with a number of factors including a shift of Chinese investment flows towards emerging markets and negative Chinese perceptions of the investment environment in Australia.

The database is available free at: www.chiia.eaber.org

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