Chinese investment in Australia plunges due to souring relation, Covid-19 impact | World News - Hindustan Times
close_game
close_game

Chinese investment in Australia plunges due to souring relation, Covid-19 impact

AFP |
Feb 28, 2021 04:04 PM IST

Data from the Australian National University released Sunday showed direct investment plunged to US$800 million last year, from US$2.05 billion in 2019.

Chinese investment in Australia plunged almost two-thirds last year to less than $1 billion as the impact of coronavirus was compounded by increasingly fraught relations between the two countries.

Last year China's direct investment to Australia focused on just 20 projects in three sectors -- real estate, mining and manufacturing -- the fewest in a decade.(AP)
Last year China's direct investment to Australia focused on just 20 projects in three sectors -- real estate, mining and manufacturing -- the fewest in a decade.(AP)

The reading marks the fourth straight drop and is just a fraction of the $13 billion injected into the country in 2016, with Canberra growing increasingly wary of the Asian superpower's intentions.

Hindustan Times - your fastest source for breaking news! Read now.

Data from the Australian National University released Sunday showed direct investment plunged to US$800 million last year, from US$2.05 billion in 2019.

The pandemic has almost halved investment globally according to United Nations trade body UNCTAD, but a much larger drop was seen in China-Australia flows, according to ANU economics professor Shiro Armstrong.

Last year China's direct investment to Australia focused on just 20 projects in three sectors -- real estate, mining and manufacturing -- the fewest in a decade.

"Naturally, this kind of data is lumpy, because of big projects, but there is a pretty clear trend we can see, since the peak in 2016 it has fallen every year quite steadily, quite dramatically," Armstrong told AFP.

In 2016 there were a number of large investments from the China Investment Corporation, a sovereign wealth fund, and China's State Power Investment Corporation bought Pacific Hydro.

While China remains Australia's largest trading partner, political relations are at their lowest in decades, with Canberra recoiling at Beijing's efforts to translate economic might into political and military power.

China has slapped punitive sanctions on a range of Australian exports as the two countries clash on a range of issues from influence operations, national security rules, China's internal crackdowns and transparency over its handling of the coronavirus pandemic.

There is also growing concern in Australia that Beijing has used trade, investments and diaspora groups to gain political leverage, which has prompted a slew of legislation.

Armstrong said new Australian rules to screen investments for risks to national security had a particularly chilling effect and could help explain the decline.

"There is a national security test now for foreign investment, there have been high profile cases of Chinese investments being withdrawn" he said. "That shakes confidence in foreign investors."

Australia has rejected Chinese bids for Japanese-owned Lion Dairy and local construction firm Probuild.

The Treasury Department is also reviewing existing investments, a probe that could lead to some projects being unwound on national security grounds.

That review is expected to conclude by December 10.

According to Australian government figures, China is the ninth-largest investor in the country, well behind the United States, Britain, the European Union and Japan.

Unlike official data, the ANU figures include investment from Chinese subsidiaries already operating in Australia, and track investments rather than announcements of investments to come.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away! - Login Now!

Get Latest World News along with Latest News from India at Hindustan Times.
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On