SYDNEY, Feb.28 (Reuters) – Chinese investment in Australia fell 61% in 2020 to the lowest level recorded by the Australian National University in six years, coinciding with a deepening of the diplomatic dispute.
The university’s East Asia Economic Research Bureau’s annual tracking study recorded A $ 1 billion ($ 783 million) in Chinese investments in 2020, including real estate transactions (45% ), mining (40%) and manufacturing (15%).
The fall was larger than the 42% drop in foreign direct investment around the world measured by the United Nations amid the COVID-19 pandemic, said Shiro Armstrong, the director of the office.
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“This reflects the effects of COVID but also a closer scrutiny of foreign investment by the Australian government, especially from China,” he said.
Australia has announced an overhaul of its foreign investment laws in 2020 to give the government the power to veto or force the sale of a business if it creates a risk to national security.
Treasurer Josh Frydenburg said in June that the national security test would be applied to telecommunications, energy and utility companies, and companies that collect data.
Chinese company Mengniu abandoned a deal to buy Australian dairy company Lion Dairy and Drinks from Japanese company Kirin in August after the Australian government said it would block the sale.
The Chinese embassy said in November that 10 Chinese investments had been blocked in Australia for national security reasons, among a list of 14 grievances Beijing had over Australian government policy.
China has since imposed dumping duties on Australian wine and barley and restricted the unloading of Australian coal at Chinese ports.
Chinese investments in Australia peaked at AU $ 16.5 billion in 2016, covering agriculture, transport, energy utilities, healthcare, mining and real estate, according to the study. the ANU.
In 2020, 86% of Chinese investments in Australia came from Australian subsidiaries of Chinese companies.
($ 1 = Australian dollar 1.28)
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Reporting by Kirsty Needham, editing by Karishma Singh
Our Standards: Thomson Reuters Trust Principles.