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Thursday, October 21, 2021

Chinese investment in Australia plummets

Chinese investment in Australia fell by more than 61% in 2020, according to new data from the Chinese Investment in Australia Database (CHIIA) at The Australian National University.

The fall followed a 47% in 2019, and is the lowest investment figure recorded over the past six years.

CHIIA reported 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.

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% of new Chinese investment was sourced from within Australia.

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

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

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

“The United Nations reports that total foreign investment to Australia fell by 46 per cent, whereas foreign investment to Japan, China, India and some developed countries such as Sweden and Spain rose while investment to the United States and the United Kingdom plummeted.”

The number of Chinese investments recorded in 2020 was only 20, well down from a peak of 111 investment projects in 2016.

In 2020, a huge 86% of Chinese investment in Australia originated from Chinese companies already established within Australia, meaning purchases were made via Australian subsidiaries rather than by foreign firms directly.

CHIIA has tracked Chinese investment in Australia from 2014-2020. In that period, almost every sector of the Australian economy has seen Chinese investment activity.

But, in 2020 recorded Chinese investment was limited to just three sectors: real estate ($461 million), mining ($414 million) and manufacturing ($153 million).

The full dataset is available at www.chiia.eaber.org

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