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Summary
- Amid the ongoing diplomatic tensions, the Chinese investment in Australia plunged significantly in 2020.
- The investment from China dipped by 61 per cent last year to the lowest level recorded by the Australian National University (ANU) in six years.
- In November 2020, the Chinese embassy claimed that Australia had blocked 10 Chinese investments on national security grounds.
Amid the ongoing diplomatic tensions, Chinese investment in Australia plunged significantly in 2020. Even though global investments were negatively impacted due to the coronavirus pandemic, the increased scrutiny of Chinese investment may also have contributed to the fall, according to experts.
The investment from China dipped by 61 per cent last year, hitting a six-year low as recorded by the Australian National University (ANU). According to the ANU data, the investment by the second largest global economy in Australia stood at A$1 billion last year. While in 2016, the Chinese investment in Australia had surged to A$16.5 billion.
Image Source: © Cmmeraydave | Megapixl.com
Of the total investments made by China last year, real estate received 45 per cent and manufacturing attracted 15 per cent. Also, a mighty 86 per cent of the Chinese investment in Australia stemmed from the Australian subsidiaries of Chinese firms, by 2020.
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According to Shiro Armstrong, ANU bureau director, the decline was larger than the 42 per cent drop in foreign direct investment (FDI) globally measured by the United Nations amid the coronavirus pandemic.
Image Source: © Cmmeraydave | Megapixl.com
The decline in investment apparently reflects the worsening diplomatic and trade ties between the two countries.
In November 2020, the Chinese embassy said that Australia had blocked 10 Chinese investments on national security grounds. In August last year, Chinese firm Mengniu abandoned a deal to acquire the Australia dairy firm Lion Dairy and Drinks from Japanese company Kirin after the Australian government indicated it would block the sale.
The Chinese government had also responded by imposing additional tariffs on Australian wine and barley. It restricted the uploading of Australian coal at its ports.
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