China invests big, Australia slow to follow

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China invests big, Australia slow to follow

Increasing Chinese investment in Australian companies has been a sensitive political issue.

But investment the other way - from Australia into China - is much lower and gets far less attention. A new report points out that even if the current barriers to foreign investment into China are lifted, Australian companies are unlikely to rush over with offers. It adds that with bilateral free trade talks apparently stalled those barriers will come under increased scrutiny.

Presenter: Karon Snowdon, finance correspondent
Speakers: John Larum, economic consultant and Lowy Institute author; Tony Abbott, opposition leader, Australian Liberal Party

SNOWDON: Australia trades a lot with China, two way trade is valued at US$76 billion.

But it doesn't invest in the country much.

The opposite is true and is assuming greater importance for both countries. China has far more money invested in Australia, a fact that has at times been politically sensitive.

John Larum is a former Australian treasury official and a former president for the fund manager, UBS, in China.

In a paper for the think tank, the Lowy Institute, he writes that foreign investors including from Australia now feel less welcome there.

LARUM: There's even individual companies now speaking up and that's very unusual. And the response from the Chinese is that in the past foreigners have had a very good deal, that foreigners have been spoilt.

SNOWDON: One side of the picture is that Australian companies prefer to invest in similar environments - in the west primarily - New Zealand, the US and Europe.

But also in China the rules are getting tougher. It no longer simply needs the money and government policies are changing to reflect environmental concerns and a move to quality over quantity, compared to the past.

Yet, investment continues to pore in. China is second only to the United States in popularity and foreign investment climbed 20 per cent in the first seven months of this year.

LARUM: So, if you're a foreign investor and you turn up and you want to establish a t-shirt factory or a plastic toy factory, you won't get the entry you got five or ten years ago.

SNOWDON: This week Taiwan's parliament ratified its economic agreement with mainland China. Cold comfort for Australian negotiators locked in what appear to be stalemated five year old talks with China on a bilateral free trade agreement.

LARUM: Talking to Australian companies in particular they have low expectations of the outcome particularly for the investment side. And it seems that at some stage we need to ask the question is it time to call it quits? So, I think, given the interest that China has in investing here and it does especially in minerals there will be a higher profile given to barriers that we face in going to China.

SNOWDON: Australia, of course, is just coming up to a federal election. Regardless of who wins do you think it will be seen as a new era from Beijing's point of view, given that either way there is a new person at the top in Canberra?

LARUM: I think they will still look at the Foreign Investment Review Board and they will still see the national interest criteria in place. So, I think whatever government we have in place, we will still have those and they will look closely at the outcome but they won't be too concerned about a substantial change occurring in terms of the attitude to Chinese investment if there's a change of government.

SNOWDON: In a speech four days before the election, opposition leader, Tony Abbott, expressed some concerns about investment by Chinese state owned entities. But he didn't flag any change to the foreign investment rules.

ABBOTT: A Chinese business is much more an arm of the Chinese government. I would be very careful about majority ownership of Australian assets by government controlled entities. And I'm not singling out China, I hasten to add.

SNOWDON: How such views are interpreted in Beijing remains to be seen. An editorial running in the China Daily newspaper a day ago says regardless of who wins the election, the next government is likely to be more friendly to China, citing the author's belief that both major parties are showing a willingness to improve the relationship after the tensions of the Stern Hu case.

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学习笔记

I hasten to add: 必须补充
scrutiny: careful and thorough examination 仔细检查；认真彻底的审查
think tank: 智库
A Chinese business is much more an arm of the Chinese government. ==>全句为："A Chinese business is much more an arm of the Chinese Government than an Australian business would normally be an arm of the Australian Government"，这是Abbot眼里的中国国企，不知道是不是所有人都这么看?

funnybird

overseas most likely has some sort of government backing - you'd be naive if you think otherwise given the enormous greed and the rampant corruption in the current political-economic environment in China; of course, we cannot rule out the possibility that there's some level of strategic planning by the Chinese government as well...