Chinese investors are now showing a preference for Australia’s healthcare industry over mining, according to a report jointly published by the University of Sydney Business School and KPMG. Chinese overseas direct investment (ODI) in Australia decreased by 36 percent to $1.34 billion in 2023, with healthcare surpassing mining as the primary sector of interest.
This shift in priorities for Chinese ODI is attributed to a growing focus on Belt and Road Initiative countries and mining ventures in alternative markets like Southeast Asia. Despite this trend, recent developments such as the removal of wine tariffs are expected to reignite Chinese investor interest in Australian businesses.
Notable investments highlighted in the report include Hillhouse Investment Management’s acquisition of healthcare company George Clinical for $500 million, Hainan Mining’s purchase of energy firm Roc Oil Company for $245 million, and Beijing Energy International Holding’s acquisition of renewable energy providers for $197 million.
The report also revealed that healthcare accounted for 42 percent of Chinese investment inflows through two transactions totaling $562 million. Food and agriculture investments made up 2 percent, oil and gas investments shared 18 percent, and renewable energy investments represented 15 percent.
University of Sydney Business School Professor Hans Hendrischke noted the emergence of Chinese-funded mining ventures in Southeast Asia as a factor intensifying competitive pressures and diverting attention from Australian opportunities. While Chinese investor confidence in mergers and acquisitions in Australia remains low, there is a growing interest in greenfield investments in sectors like electrical vehicles, solar panels, batteries, and industrial machinery.
Australia Presses for Removal of More Trade Impediments
Trade and Tourism Minister Don Farrell highlighted Australia’s challenging bilateral relationship with the Chinese Communist Party (CCP) during a speech at the Sydney Institute. Despite securing the removal of import duties on Australian wine, efforts are ongoing to eliminate remaining trade barriers on live rock lobster and certain red meat exports.
Mr. Farrell emphasized the importance of diversifying into new markets through trade agreements with countries like India and the UK, recognizing China as Australia’s largest trading partner.
