China investment to Australia drops for 3rd year as ties fray

SYDNEY • Chinese investment to Australia last year dropped for the third straight year, researchers reported yesterday, a further sign of the impact of souring economic and diplomatic ties.

Total direct Chinese investment to Australia fell by about half to A$2.5 billion (RM7.5 billion) in 2019, from A$4.8 billion a year earlier, according to a statement from Australian National University (ANU), which collects and compiles data from the Treasury and other federal departments.

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 totalled 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 Ltd from joining the rollout of the nation’s 5G network.

Last month, milk producer China Mengniu Dairy Co Ltd dropped a plan to acquire Kirin Holdings Co’s Australian beverage unit Lion Dairy & Drinks after being told the deal would likely be blocked.

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