Sydney, 1 March 2021 - The International Trade Council (ITC) expresses its concern over the recent 61% drop in Chinese investment in Australia in 2020, marking a six-year low. The drop comes amid growing diplomatic tensions between the two countries, and signals a major challenge to Australia's economy, which has long benefited from Chinese investment.
According to the Chinese Investment in Australia Database (CHIIA) by the Australian National University, only 20 Chinese investments were recorded in 2020, compared to the peak of 111 in 2016. The total Chinese investment in Australia amounted to just over $780m (A$1bn; £550m), which is a 47% drop from 2019's investment of $1.57bn.
"The decline in Chinese investment in Australia outpaced falling global foreign investment last year," said Dr Shiro Armstrong, director of the East Asian Bureau of Economic Research, where CHIIA is based. "The fall in Chinese investment to Australia was much larger than the 42% decline globally according to the United Nations data, although the data is measured differently," he added.
Chinese companies have invested in all sectors of Australia's economy in recent years, but last year they only bought into the real estate ($357m), mining ($321m), and manufacturing ($119m) sectors. The ITC notes that this decline is partly due to Australia's investment settings during the Covid-19 pandemic, including temporary measures that subject every proposed investment to scrutiny by Australia's Foreign Investment Review Board.
The ITC urges both countries to work towards resolving their differences and encourages them to continue dialogue and cooperation. It also highlights the importance of foreign investment to the growth and stability of Australia's economy and the benefits that it can bring to both countries.