TRACKING CHINESE FOREIGN INVESTMENT IN AUSTRALIA
By Rebecca Lowe
Researchers from the Australian National University have recently launched the first comprehensive public database aimed at tracking Chinese commercial investment in Australia. The Chinese Investment in Australia (CHIIA) Database is based on a new methodology developed by the East Asian Bureau of Economic Research which produces data from public sources, using consistent classifications and transparent methods, making it suitable for use in peer-reviewed academic publications.
The project was developed in consultation with a number of partners including the Australian Bureau of Statistics, private industry partners and the Reserve Bank of Australia.
Historically, measuring foreign investment in Australia has been very difficult with just two main sources of data – the Foreign Investment Review Board and the Australian Bureau of Statistics. Each of these sources have different methodologies to collecting the data which has typically resulted in a considerable underestimation of Chinese investors’ presence in the Australian economy.
CHIIA data is publicly available and comprehensive, measuring almost 50 different dimensions of Chinese investment in Australia. The CHIIA methodology will offer new insights and clarity on measuring foreign direct investment and it is hoped that the database can be replicated to put together data on other foreign investment flows.
The CHIIA data collected thus far between calendar years 2014 – 2017 shows there has been $40.4 billion worth of Chinese investment during the period, through a total of 262 transactions. Investment in Australia peaked in 2016 with $14.9 billion of transactions in that calendar year, followed by $8.9 billion in 2017.
Whilst mining and real estate investments often make news headlines, the data shows investment in healthcare and other service industries is growing as can be seen in the chart below with shows the share of Chinese investment in Australia by sector (per cent of annual total) during the period.
Data collected also shows Chinese investors are predominantly investing in urban areas, with less than 10% of total investment during the 4 year period received in rural areas. The chart below shows the level of Chinese investment received by state and location of receiving entity (A$ millions).
The economic relationship between Australia and China remains extremely important and the information collected through the database will support informed discussions when creating legislative policy and assist in making the most of the opportunities that the growth of Chinese investment offers to Australia.
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