Chinese investment in Australian agribusiness reached A$375 million ($287 million; €252 million last year and will remain strong in 2016, according to a KPMG and University of Sydney report.
The report says 12 separate deals in sectors including dairy, beef and cotton made 2015 a breakout year, describing it as the first “to show substantial growth in agriculture and agribusiness investment”.
China’s overall overseas direct investment into Australia grew by 33 percent to $11.1 billion in 2015, making Australia the second most popular country for Chinese investment after the US.
The growth is despite a change in regulation requiring the Foreign Investment Review Board (FIRB) to review agricultural land acquisitions by foreigners valued at A$15 million or more. Chinese agribusinesses perceived the benefits of the China Australia Free Trade Agreement, which became effective in December, to outweigh the challenges of FIRB scruity.
Although the Chinese government is perceived to be pushing investment abroad for food and other national security reasons, the majority of financiers surveyed for the report said making a profit was their first motive for investing in Australia.
The investment was geographically concentrated in the country’s south-east. Nearly half (49 percent) was directed towards New South Wales, and 34 percent was channelled into Victoria.
Proportionally, Victoria attracted more money in agriculture, bringing in A$137 million, compared with A$75 million ($57 million; €50 million) in New South Wales.
The report predicts Chinese investment in Australia will increase by 10 percent in 2016 and remain strong for several years, with food and agriculture being a significant driver for growth.