Business

Australia clamouring for Chinese investment dollars

COMPETITION for Chinese investment is heating up, despite Australia remaining atop the pile for the eighth year running last year, a new study has revealed.

The KPMG-University of Sydney China Studies Centre released its latest research on out-bound investment flows from the huge economy on Friday.

It found while Australia experienced a 12% rise in Chinese investment, particularly in mining and gas, competition from the United States and Canada was threatening investment flows.

The billions of dollars coming out of China are also finding their way into new markets, with renewable energy and agricultural land two particular targets.

University of Sydney's Professor Hans Hendrischke said there was now no denying the rest of the world was hot on Australia's heels in pursuing the Chinese dollar.

Canada achieved top position for Chinese investment for the 2012 calendar year, due to the completion of one enormous transaction - the US$15.1 billion CNOOC-Nexen oil and gas company deal.

By the end of 2012, total accumulated investment reached US$51 billion in Australia, followed by US$50.7 billion in the USA and US$36.7 billion in Canada, with Brazil and Russia also major recipients.

Although short of the historic peak of US$16.2 billion in 2008, Chinese direct investment inflows into Australia in 2012 rose 21% from 2011 to reach US$11.4 billion in 27 transactions, up from US$9.4 billion in 2011 and US$3.7 billion in 2010.

"These numbers confirm that Australia is still a priority destination due to our vast supply of high quality natural resources, stable and reliable institutional systems and clean, green and fresh image for lifestyle," KPMG's head of China practice in Australia, Doug Ferguson said.

"While mining and resources still dominate investments, we're seeing greater diversification towards LNG, agribusiness, renewable wind energy and real estate."

Mr Ferguson also expected continued growth in areas including engineering and architecture, renewable energy, specialist environmental services and food safety and processing.

At home, Western Australia and Queensland were the big winners of Chinese investment, particularly on the back of mining and resources.

Notably, the proportion of investments by privately-owned Chinese companies rose during 2012, while the share of capital invested by Chinese state-owned enterprises fell during 2012.

Private Chinese investors completed 26% of all deals by number, and 13% by deal value, in contrast to historical trends of state-owned enterprises being behind 94% by value and 80% by number of deals between 2006 and 2011.

"We are starting to see the next wave of Chinese investment in Australia being made by privately owned companies and this trend will continue under the new investment visa program which opens the door for high net wealth Chinese investors," Mr Ferguson said.

"However, in view of the large size of deals in Australia, the dominance of SOEs is likely to continue as these companies dominate the energy, mining and infrastructure sectors at home in China and have strong central government support to invest abroad."

Chinese investment by industry:

  • Mining: 48%Gas: 42%
  • Renewable energy: 2%
  • Other: 8%

Chinese investment by state (US dollars):

  • WA: $6.3b
  • QLD: $3.7b
  • SA: $523m
  • VIC: $444m
  • TAS: $182m
  • NSW: $117m

SOURCE: KPMG, Demystifying Chinese investment in Australia, 2013.

Topics:  chinese investment, kpmg, mining, resources




Bomb squad now in possession of suspicious device

Fragments of a suspicious device that were found underneath a park bench in an Ipswich park this morning.

Device is a "magnet attached to...small, cylindrical metal object"

PHOTOS: 'Free dress day' comes with long set of rules

West Moreton Anglican College (WestMAC) dress up for charity day. Year 11 student Georgia Ross dancing with her friends.

No makeup, no masks, no roller type shoes.

Teacher retires after 37 years at Ipswich Central

Gerard Wilkins outside the building that now bears his name at Ipswich Central State School.

Gerard Wilkins reflects on his teaching career

Latest deals and offers

Thy Art Is Murder are killing it

See Thy Art is Murder on their killer tour happening right now. Photo Contributed

We talk with Thy Art is Murder about touring, babies, and new music

Date announced for Prince tribute concert

A Prince tribute concert will take place later this year

Matt Damon is taking a break from acting

Matt Damon is taking a break to spend time with his family

Police foiled terrifying 1m plot to kidnap Katie Price

Police foiled a £1 million plot to kidnap Katie Price and her family

Kristen Bell's baby confession

Kristen Bell once pretended to be asleep when her baby woke up early

Babylon 5's Jerry Doyle has died

Jerry Doyle has died from unknown causes at the age of 60

Australia Post to open at Orion

Australia Post.

Service to open to customers in late August

Town with 'unique country flair' will be ruined: resident

Jonathan Emms of Rosewood is concerned about a proposed townhouse development for this John Street block of land.

Residents concerned by high density development proposal

You can own this Queensland town for just $1

Yelarbon

Unprecedented auction of town's business centre with no reserve

Work starts on $15M Caloundra apartment building

Turning the first sod at the Aqua View Apartments site in Kings Beach are (from left) husband-and-wife developers Alex Yuan and Stella Sun with construction company Tomkins director Mike Tomkins and Councillor Tim Dwyer.

Developers excited about addition to Kings Beach skyline

72-year-old Coast developer set to start new project

GREEN LIGHT: The Cosmopolitan has been approved for development at Cotton Tree.

Meet the Canberran set to deliver another chapter for Coast suburb