China’s investment in Australia drops in ’23

Chinese investment in Australia dropped significantly in 2023, reaching the second-lowest level in 18 years, Bloomberg reported on Sunday, citing KPMG and the University of Sydney.

Direct investment fell by 37 per cent to $892 million compared to the previous year. Meanwhile, China’s global outbound investment increased, driven by projects related to President Xi Jinping’s Belt and Road Initiative.

The decline in investment in Australia was particularly notable in industries like commercial real estate and mining, which have historically attracted Chinese companies.

The report highlighted a potential shift in Chinese investment focus from infrastructure and resources to processing, which could pose competitive challenges for Australia.

Relations between China and Australia have improved since the election of Prime Minister Anthony Albanese’s government in May 2022, following strained ties during former Prime Minister Scott Morrison’s tenure.

China recently lifted punitive tariffs on Australian wine exports, indicating a thaw in trade tensions.

China is currently facing challenges such as a property crisis and weak consumer sentiment, which could impact the country’s economic outlook as the world’s second-largest economy.