02 Mar Chinese investment in Australia falls by 61% in 2020
Chinese investment in Australia tumbled by 61% last year as diplomatic relations between the two nations slumped to a fresh nadir.
The Australian National University’s Chinese Investment in Australia Database (CHIIA) recorded just over A$1 billion in investment in 2020 – the lowest total sum in six years. Last year’s decline also followed a 47% drop in 2019.
Dr Shiro Armstrong, director of the East Asian Bureau of Economic Research – where CHIIA is based – said the decline in Chinese investment in Australia outpaced falling global foreign investment last year.
“Foreign direct investment fell globally by 42% according to the United Nations (UN),” Armstrong said in a media release. “UN data is measured differently, but the fall in Chinese investment to Australia was much larger.”
Waning Chinese investment could be attributed to changes in Australia’s investment regulations during the COVID-19 pandemic, after the government announced temporary measures in March that would subject every proposed investment to scrutiny by Australia’s Foreign Investment Review Board (FIRB).
Diplomatic and trading ties further deteriorated when Canberra called for an independent inquiry into the origins of the COVID-19 outbreak in Wuhan. In response, Beijing slapped punitive tariffs on Australian barley, restricted beef imports and initiated an anti-dumping inquiry into wine imports.
Then in August, Australia’s Treasurer Josh Frydenberg stopped the $600 million sale of Japanese beverage giant Kirin’s wholly-owned Australian subsidiary Lion Dairy and Drinks to China Mengniu Dairy.