Australia is losing an important source of foreign funding, with Chinese investment in the country plummeting by 70 per cent last year — its lowest level since the global financial crisis.
Why the big fall?
In 2016, Beijing started to impose restrictions on capital outflows due to concerns over excessive debt, inappropriate investment and capital flight. At the same time, Australia's Foreign Investment Review Board's tougher application process subdued interest from potential Chinese buyers."US, very strongly, and Europe, [including] the UK, Germany and France, are screening Chinese investment now for any potential conflicts that they could have with Chinese controls over certain assets [and] Australia is part of that," he said.
"The main sentiment is to wait and see. For a lot of Chinese companies, Australia is their first overseas country that they have ever invested [in]. There's a lot of commitment."Traditionally, Chinese firms view Australia as a "test market". They get a "Western experience" by investing in Australia and then expand to other similar economies.
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