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Demystifying Chinese investment in Australia (May 2017)

1 May 2017

This May 2017 report is the latest in a series of Demystifying Chinese Investment in Australia reports, by KPMG and The University of Sydney's China Studies Centre. It analyses Chinese outbound direct investment into Australia in 2016 and includes specialist contributions from Knight Frank, providing data and analysis on real estate transactions and Powell Tate Australia, provided analysis on gaining a social licence to operate.

Key findings

  • Globally Australia remains the second largest recipient of Chinese ODI with data showing over USD 90 million of accumulated new investment since 2007.
  • 2016 saw the highest Chinese investment inflow to Australia since 2008 peak (AUD 15.36 billion/USD 11.49 billion in 2016).
  • Chinese investment in Australia increased 11.7 percent from 2015 to AUD 15.36 billion.
  • New South Wales continued to be the priority state for Chinese investments at 53 percent, on the back of commercial real estate, followed by Victoria at 25 percent.
  • Commercial real estate remains the largest sector of investment at 36 percent.
  • This year saw a significant change in real estate investment with residential development sites now accounting for 51 percent of value, a significant increase compared to just 27 percent in 2015.
  • For the first time, energy overtook mining as a preferred ENR sector attracting AUD 1.149 billion.

There are signs of a growing maturity by Chinese investors in the Australian market. The number of joint ventures is increasing with more repeat investments by established Chinese companies. This has set a foundation for growth in future investment.

There are already well over 500 large Chinese companies invested in Australia which continue to show interest in high quality, large scale investments and projects.

Australia has a strategic opportunity to grow and diversify its already strong economic partnership with China through structural reform.

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