James Laurenceson, Deputy Director, Australia-China Relations Institute, University of Technology Sydney |
1. Australia’s agricultural exports to China reached $8.5 billion in 2014-15.[1] This compared with:
- $5.1 billion to the US
- $3.9 billion to Japan
- $3.3 billion to Indonesia
2. A Chinese government-owned company wanting to invest in Australia’s agricultural sector must obtain Foreign Investment Review Board (FIRB) approval, irrespective of the value of the proposed purchase.[2]
3. A Chinese privately-owned company wanting to buy Australian agricultural land must obtain FIRB approval if the value of the purchase is $15 million or more.[3] This threshold is cumulative.[4] It compares with a non-cumulative threshold of $1.09 billion threshold for investors from the US, New Zealand and Chile, and a non-cumulative $50 million threshold for those from Singapore and Thailand.
4. A Chinese privately-owned company wanting to buy an Australian agribusiness must obtain FIRB approval if the value of the purchase is $55 million or more.[5] This compares with a threshold of $1.09 billion threshold for investors from the US, New Zealand and Chile.
5. In 2013-14, the value of approved Chinese investment in the agriculture, forestry and fishing sector was $32 million.[6] This compares with:
- $602 million for Canada
- $600 million for Hong Kong, China
- $584 million for the US
6. Over the period 2009-10 to 2013-14, Chinese investment accounted for 2.9 percent of total approved foreign investment in the agriculture, forestry and fishing sector.[7] This compares with:
- 19.7 percent for Canada
- 19.6 percent for the US
- 7.6 percent for the UK[8]
7. In 2014, the food and agribusiness sector accounted for 1.5 percent of total Chinese investment in Australia. Since 2010 it has accounted for 2.9 percent.[9]
8. A 2015 poll of more than 1500 Australians[10] on preferences toward foreign investment in agriculture revealed that the public:
- prefer bigger dollar value investments to smaller ones
- are indifferent to whether the foreign company investing is government or privately-owned
- prefer investment from the UK than China, but the difference is small
Endnotes
[1] Department of Agriculture and Water Resources, Agricultural commodities: December quarter 2015.
[2] Foreign Investment Review Board (FIRB). http://firb.tspace.gov.au/files/2015/09/Australias_Foreign_Investment_Policy_December_2015_v2.pdf
[3] This rule was introduced in March, 2015. Source - FIRB
[4] “Cumulative” means that if a given Chinese company already owns agricultural land worth $15 million, any further purchases will require FIRB approval.
[5] This rule was introduced in December, 2015. Source - FIRB
[6] FIRB Annual Report 2013-14.
[7] FIRB Annual Report, various years.
[8] Hong Kong, China accounts for 4.9 percent.
[9] KPMG and Sydney University, http://demystifyingchina.com.au/. This database records Chinese investment deals worth more than $5 million.
[10] Laurenceson, Burke and Wei (2015). http://press.anu.edu.au/wp-content/uploads/2015/12/analysis03.pdf
Author
Professor James Laurenceson, Deputy Director, Australia-China Relations Institute, University of Technology Sydney