Chinese investment in Australia plummeted by more than 61 percent in 2020, according to new data from Australian National University (ANU). It follows the continual downward trend of Chinese investment in Australia since the 2015-16 financial year.
The university’s Chinese Investment in Australia (CHIIA) Database reported that the total investment in 2020 added up to just over AU$1 billion ($775 million), down from $2.6 billion in the previous year. It was also generated by only 20 deals.
The database has been operating since 2014 and pays particular attention to tracking investors back to their ultimate parent companies rather than focusing on the immediate origin of the investor.
The large majority of the investment—86 percent—came from Chinese companies already established within Australia, not directly from foreign firms.
Shiro Armstrong, Director of the East Asian Bureau of Economic Research, attributed the fall to diplomatic tensions, additional scrutiny of foreign investment by the government, and the effects of COVID-19.
“It’s a remarkable collapse given Australia was the largest destination for Chinese investment during the commodity boom,” Armstrong said.
However, in 2020, Chinese investment was confined to only three sectors: real estate ($461 million), mining ($414 million), and manufacturing ($153 million).
This decline sees Chinese investment in Australia drop to the lowest point in six years amid a continual strain in the relationship between the two countries.
The diplomatic tensions began escalating after Australia called for an independent inquiry into the origins of the CCP virus.
The Australian government then introduced the “National Security Test”, which gives the federal government power to scrutinize and reject foreign investment deals deemed a risk to national security.
“Quite frankly, no strategic asset or infrastructure should be owned, built, designed, or have anything to do with any company that is linked to the CCP,” Federal Member of Parliament George Christensen told The Epoch Times. “It is just a national security risk, full stop.”