Chinese investors are more wary about Australia, with a growing number saying they feel unwelcome.
A report from the University of Sydney Business School and financial services firm KPMG says there is a higher level of apprehension among Chinese investors towards Australia because of political debate and diplomatic tensions, a perceived decline in support from the Australian government, and little support among the media.
The report says only 35 per cent of 45 Chinese companies that were surveyed felt that they were welcome to invest in Australia – down from 52 per cent in 2014.
Professor of Chinese Business and Management, Hans Hendrischke, says the last three years have been financially favourable for Chinese investors in Australia, as they gain familiarity and confidence in the Australian market.
“While most Chinese investors retained a level of optimism about their Australian investments, some investors are apprehensive due to diplomatic tensions and the sense of feeling unwelcome,” Professor Hendrischke said.
The report, Demystifying Chinese Investment in Australia, said Chinese investment in Australia fell 11 per cent to $US10.3 billion in 2017, from $US11.5 billion in 2016.
KPMG Australia’s Head of Asia and International Markets, Doug Ferguson, said greater Chinese government control over overseas investment and money flowing out of China, and Australian restrictions on foreign investment in strategic infrastructure assets, had generated testing conditions for Chinese investors.
“The numbers don’t lie: Chinese ODI (outbound direct investment) in Australia has fallen,” Mr Ferguson said.
The report said Chinese investment in the United States in 2017 took a sharper fall than in Australia, with investment in the US down 35 per cent from 2016.
CHINESE INVESTMENT IN AUSTRALIA:
* Australia is the second largest recipient of accumulated Chinese investment, after the US, with $US99 billion since 2008.
* Investment in Australia by private Chinese companies rose in 2017, but investment by Chinese government-owned enterprises fell for the first time since 2014.
* NSW attracts 42 pct of investment, Victoria 36 pct, and Western Australia 14 pct.
* Mining was the largest sector for Chinese investment in Australia in 2017, followed by commercial real estate, and investment in the healthcare sector is surging.