Brimming stiffness over the COVID-19 outbreak has undeniably caused stress in Australia and China's relationship. Australia has been one of China’s top FDI destinations, and there have been signs of increasing conflict between the two nations.?
As per a report by KPMG and the University of Sydney demystifying Chinese Investment in Australia, Chinese investment in Australia fell 58% from A$8.2 billion in 2018 to A$3.5 billion in 2019. The report revealed that the number of Chinese investment deals fell 43%, from 74 in 2018 to 42 in 2019, with an average deal size down to A$81.75 million.
Since 2008, Chinese firms have supplied more than US$ 107 billion to Australia. The decline in new Chinese investment was in contrast to significant growth in the bilateral trade which rose by 21% n 2018-19 by achieving the highest volume ever, i.e. A$235 billion.
However, the downturn in 2019 brought Chinese outbound direct investment (ODI) to one of the lowest since investment from China was at the top in mining and energy in 2008.
Trade relations between China and Australia seem to have deteriorated in recent weeks after Australia called for an international investigation into the origin of COVID-19. While, China imposed tariffs on Australian barley and banned imports of beef from 4 Australian shambles, 3 weeks ago, which added to the suspicion that tariffs were in a sense punishment for Australia’s support for an inquiry into coronavirus origin.
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