Chinese investment in Australia growing and diversifying

Chinese investment in Australia last year returned to positive growth and is rising strongly with a record number of deals bringing Chinese investors into new industries, according to a Monday report by KPMG Australia and The University of Sydney.

Mega deals, with seven involving 500 million Australian dollars (AUD) or more during the year, helped bring the total value of investment to 15.09 billion AUD (11.1 billion U.S. dollars), a 32.9-percent increase from the previous year in USD terms (or a 59.5-percent increase in AUD), according to the report.

It was the second highest inflow year for new Chinese investment into Australia, behind the previous peak driven by investment in the mining sector in 2008. On the international stage, Australia maintained its position as the second largest recipient of aggregated Chinese direct investment between 2005 and 2015, behind the United States.

In Australia, commercial real estate remained dominant for the second year in a row, accounting for 45 percent of the total investment volume. There was also significant investment in renewable energy and health, and long-awaited growth in agriculture and agribusiness investment.

Chinese investors also moved into new geographical territory, with the Northern Territory receiving over AUD 565 million in investment for the first time. New South Wales (NSW) remained the top destination for investment, attracting 49.3 percent of the national total.

"Following two years of moderately declining Chinese investment, the resurgence of interest and diversification by Chinese companies in 2015 is a strong endorsement of the attractiveness of Australia's economy. Alongside continued interest in the NSW and Victorian commercial real estate sectors, there has been activity and major deals in renewables, agribusiness and, for the first time, healthcare," said report co-author, Doug Ferguson, Head of KPMG Australia's Asia and International Markets in a press release.

"Our research has also shown that, for Chinese companies looking to expand internationally, Australia is seen as a strong first port of call. As China embarks upon its next Five Year Plan and continues to develop as a leading global economy, Australia is poised to profit as one of its major trading partners," said Hans Hendrischke, Professor of Chinese Business & Management at the University of Sydney Business School.

"All Chinese investors we interviewed held a highly positive medium-long term view of Australia and are looking to increase their investments in Australia," Hendrischke added.

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