Australian business conditions ripe for Chinese companies
(22 March 2013 – Australia) Australia's business-friendly conditions have made it a priority for Chinese outward direct investment, according to a recent survey.
The survey reveals a large proportion of Chinese companies are expanding offshore into the manufacturing and retail trade sectors - rather than mining as expected; and are prioritising markets like Australia that have favourable business and political conditions.
These insights are drawn from a survey based on responses from more than 250 Chinese companies that have built or are considering building a presence overseas.
Amongst those surveyed; 17 percent were large conglomerates with the remainder being of a corporate or middle market size.
Beyond Greater China (Hong Kong and Taiwan), 12 percent of respondents said they had set up an operation in Australia - the third highest behind the US (22 percent) and Singapore (18 percent).
The source said: 'As the world's 13th largest economy with only the 52nd largest population, increased capital in-flow through direct foreign investment is necessary for Australia's continued prosperity.'
'With Australia now China's seventh largest trading partner we are clearly front of mind for Chinese companies for exports and imports; however, it is important that we convert these trade links into investment links too.'
'While Chinese investment in Australia has been small to date accounting for less than 3 percent of Australia's total foreign investment in 2011, it has ranked in the top three sources for proposed investments coming through for approval in the past three years," the source commented.
"With the Chinese government now prioritising outward investment over inward investment for the first time in 2012, China's role in Australia's Foreign Direct Investment will inevitably rise in future.'
'The research comes as China's Commerce Ministry recently announced that China's outbound direct investment in the non-financial sector is expected to increase by 15 percent in 2013 to US$77.22 billion.'
'While 80 percent of China's investment into Australia to date has been in mining, its increasing demand for high-end manufacturing, renewable energy and agriculture will open up new opportunities for Australia.'
'This diversification of Chinese investment beyond mining, particularly by middle market and corporate Chinese businesses, aligns with the Australian economy's re-balancing towards non-mining sectors,' the source added.
These insights are drawn from a survey based on responses from more than 250 Chinese companies that have built or are considering building a presence overseas.
Amongst those surveyed; 17 percent were large conglomerates with the remainder being of a corporate or middle market size.
Beyond Greater China (Hong Kong and Taiwan), 12 percent of respondents said they had set up an operation in Australia - the third highest behind the US (22 percent) and Singapore (18 percent).
The source said: 'As the world's 13th largest economy with only the 52nd largest population, increased capital in-flow through direct foreign investment is necessary for Australia's continued prosperity.'
'With Australia now China's seventh largest trading partner we are clearly front of mind for Chinese companies for exports and imports; however, it is important that we convert these trade links into investment links too.'
'While Chinese investment in Australia has been small to date accounting for less than 3 percent of Australia's total foreign investment in 2011, it has ranked in the top three sources for proposed investments coming through for approval in the past three years," the source commented.
"With the Chinese government now prioritising outward investment over inward investment for the first time in 2012, China's role in Australia's Foreign Direct Investment will inevitably rise in future.'
'The research comes as China's Commerce Ministry recently announced that China's outbound direct investment in the non-financial sector is expected to increase by 15 percent in 2013 to US$77.22 billion.'
'While 80 percent of China's investment into Australia to date has been in mining, its increasing demand for high-end manufacturing, renewable energy and agriculture will open up new opportunities for Australia.'
'This diversification of Chinese investment beyond mining, particularly by middle market and corporate Chinese businesses, aligns with the Australian economy's re-balancing towards non-mining sectors,' the source added.
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