China Investment to Australia Drops for Third Year as Ties Fray

Christel Deskins

(Bloomberg) — Chinese investment to Australia last year dropped for the third straight year, researchers reported Sunday, a further sign of the impact of souring economic and diplomatic ties. © Photographer: Bloomberg/Bloomberg Australian one-hundred dollar banknotes, right, and Chinese one-hundred yuan banknotes are arranged for a photograph in Sydney, Australia, […]

(Bloomberg) — Chinese investment to Australia last year dropped for the third straight year, researchers reported Sunday, a further sign of the impact of souring economic and diplomatic ties.



a close up of a piece of paper: Australian one-hundred dollar banknotes, right, and Chinese one-hundred yuan banknotes are arranged for a photograph in Sydney, Australia, on Wednesday, April 17, 2013. Direct trading between the Australian dollar and yuan started on April 10.


© Photographer: Bloomberg/Bloomberg
Australian one-hundred dollar banknotes, right, and Chinese one-hundred yuan banknotes are arranged for a photograph in Sydney, Australia, on Wednesday, April 17, 2013. Direct trading between the Australian dollar and yuan started on April 10.

Total direct Chinese investment to Australia fell by about half to A$2.5 billion ($1.8 billion) in 2019, from A$4.8 billion a year earlier, according to a statement from Australian National University, which collects and compiles data from the Treasury and other federal departments.

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The three-year decline underscores the deterioration of a once mighty partnership between the world’s second-largest economy and its most reliant developed-nation trading partner. The statistics’ release comes after a tumultuous week for bilateral relations, which saw the last two Australian journalists based in China flee the country on fears of police detention.

Researchers cited negative Chinese investor sentiment toward the Australia economy and a shift of flows to emerging markets as reasons for the decline.

Australia-bound investment from China hit an all-time high in 2016 at A$15.8 billion, before the string of drops, ANU said. Since 2014 to last year, investment totaled A$49.3 billion, of which, the real estate sector received the most at about 24%, followed by the mining industry at 21%.

The Australian government has worked over the past few years to limit Chinese flows. In 2018, Canberra barred mobile technology maker Huawei Technologies Co. from joining the rollout of the nation’s 5G network. Last month, milk producer China Mengniu Dairy Co. dropped a plan to acquire Kirin Holdings Co.’s Australian beverage unit Lion Dairy & Drinks after being told the deal would likely be blocked.



a close up of a piece of paper: Australian one-hundred dollar banknotes, right, and Chinese one-hundred yuan banknotes are arranged for a photograph in Sydney, Australia, on Wednesday, April 17, 2013. Direct trading between the Australian dollar and yuan started on April 10.


© Photographer: Bloomberg/Bloomberg
Australian one-hundred dollar banknotes, right, and Chinese one-hundred yuan banknotes are arranged for a photograph in Sydney, Australia, on Wednesday, April 17, 2013. Direct trading between the Australian dollar and yuan started on April 10.

China has also sought to cut economic exchanges including imposing limits on citizens traveling and studying in Australia, and targeting commodity imports such as beef, wine and barley.

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