Australian officials need to adjust adverse rhetoric to court Chinese investment: experts

By Li Xuanmin Source:Global Times Published: 2018/6/13 23:03:40

Country urged to repair relations with China

Chinese and Australian flags displayed at an investment fair in Shanghai Photo: IC

Australia should adjust its anti-China stance and show sincerity in cooperating with Chinese companies, experts said on Wednesday, after data showed signs that the country's economic ties with China are cooling down.

The situation could have implications for Hong Kong-based investment and energy business CK Infrastructure, which has launched a $13-billion takeover of Australian gas network operator APA, news website reported on Wednesday.

The APA board is still evaluating the bid, but market analysts have suggested that CK Infrastructure may face uncertainties in winning local regulatory approval for the proposed deal, given the heightened political tensions between the two countries since December last year.

The worsening relations have also prompted concerns among some Chinese investors about the prospects for doing business in Australia.

"I have felt the effects of strained Sino-Australian relations this year. Now, some of the local material suppliers are no longer willing to cooperate with us, as they have formed a biased perception based on inaccurate Australian media reports," said a 30-something Chinese woman surnamed Shi who owns a fashion store in New South Wales, Australia.

A report issued by KPMG and the University of Sydney on Tuesday showed that Chinese investment in Australia dropped 11 percent year-on-year to $10.3 billion in 2017, with investment from State-owned enterprises falling for the first time since 2014.

Chinese investors' sentiment has shifted, with 70 percent of the respondents stating that "the political tensions have made Chinese companies more cautious about investing in Australia," the report said. Only 35 percent of the companies surveyed felt welcome to invest in Australia, down from 52 percent in 2014, according to the report.

Downward trend

"As long as the political split between China and Australia lingers on, Chinese companies will be wary of investing in Australia due to uncertainty over policy and the local business environment," Han Feng, professor and deputy director-general of the National Institute of International Strategy under the Chinese Academy of Social Sciences, told the Global Times.

In January, the Australian government tightened rules on foreign investment in electricity infrastructure and agricultural land, citing concerns about growing Chinese influence in Australia's business and society, the Financial Times reported.

But Nick Coyle, CEO and executive director of the China-Australia Chamber of Commerce, told the Global Times that Australia continues to offer a strong and stable regulatory environment for Chinese capital.

Yu Lei, a research fellow at Sun Yat-sen University in South China's Guangdong Province, warned that the stakes for Australia are very high as the country is in a period of economic transition and urgently needs foreign investment.

China has been the largest source of foreign direct investment (FDI) for Australia since 2013. For the financial year ended June 30, 2017, China's FDI into the country reached $38.9 billion, according to data from Australia's Foreign Investment Review Board. 

"If Chinese investors withdraw, the financing channels for local infrastructure projects will be limited," he noted.

The Australian government has asked China to approve a visit by Foreign Minister Julie Bishop, Reuters reported, a sign of the Australian side hoping to repair bilateral relations.

Yu said the only way to fix the relationship is for Australian officials to adjust their adverse political rhetoric about China and develop a more "independent and balanced foreign policy," based on the country's own interests.

"There are plenty of grounds on which China and Australia could cooperate because the two countries' economies are complementary - but only if Australia shows true sincerity," Han said.

Australia has high-quality businesses with particular strengths in areas compatible with China, such as infrastructure, tourism, education, energy, agriculture and mining, Coyle said.

Newspaper headline: Australia hurting itself: experts

Posted in: ECONOMY

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