Images of China as big investor in Aussie agriculture debunked
Print Edition
Contrary to widespread perceptions that Chinese investment is swallowing large swathes of Australian farmland, China is far from a major agricultural investor in Australia and owns under 1 percent of Australian farmland, the latest KPMG report suggests.
Released yesterday at a forum focusing on Chinese investment, the report into Chinese direct investment by KPMG and the University of Sydney’s China Studies Center — Demystifying Chinese Investment in Australian Agribusiness — looks at the scale and composition of Chinese commercial investment in Australia’s agriculture and agribusiness.
KPMG has studied China’s food demand and offers practical initiatives Australian companies can take to attract further investment.
“This is an important debate and now is the time to have it. Australia has important choices to make,” said report co-author Doug Ferguson, head of KPMG’s Asia Business Group.
“China is not only Australia’s largest trading partner, but also the largest trading partner of more than 120 economies, many of which are competing for agricultural trade and investment, including New Zealand. Foreign investment in the agribusiness sector is a complex and confronting issue for many in industry, government and broader society. As a result of this focus, Chinese companies feel cautious about engaging with Australian agribusiness.”
The research has found that Chinese investment in Australia’s agricultural sector is only a recent phenomenon.
“Our database shows a total of only 10 completed deals, with an accumulated value of US$1.05 billion invested in the Australian agricultural sector since 2006,” said Hans Hendrischke of the University of Sydney Business School.
“Last year, Chinese investment into Australian agriculture accounted for less than 3 percent of the total Chinese overseas direct investment into Australia, including the Cubbie Station deal. Overall, between 2006 and 2012 only 2 percent of Chinese investment to Australia has gone into agriculture.”
By the end of last year, China was only the ninth-largest foreign agricultural investor in Australia, at 3 percent of the total outbound direct investment. This is well behind the US at 24 percent, the UK at 14 percent, Japan at 10 percent, and even Singapore at 4 percent.
“Foreign companies are estimated to own 11.3 percent of Australian land and Chinese companies appear to own less than 1 percent of Australian farmland,” said Hendrischke.
New South Wales attracted nearly 50 percent of completed Chinese agribusiness investment in the research period.
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