20160805-毕马威-Demystifying_Chinese_Investment_in_Australia_34页_1mb_1mb

Summary of "Demystifying Chinese Investment in Australia"

Core Content

This report, published by KPMG and The University of Sydney, provides a detailed analysis of Chinese outbound direct investment (ODI) in Australia for the calendar year 2015. It aims to clarify the nature and distribution of such investments, addressing common myths and providing factual insights.

Main Points

Overview of Chinese Investment in Australia

• Total ODI in 2015: USD 11.1 billion (AUD 15.09 billion), a 32.9% increase in USD terms and a 59.5% increase in AUD terms compared to 2014.
• Growth Drivers: A return to mega-sized deals by both state-owned enterprises (SOEs) and private companies, and a continuing increase in the number of investments, mainly from private investors.
• Annual Growth: Positive annual growth trend resumed after a 9.1% decline between 2013 and 2014.
• Mega Deals: Seven deals of AUD 500 million or more were recorded, with four exceeding AUD 1 billion.
• Geographic Focus: New South Wales (NSW) remained the top destination, attracting 49.3% of total investment. Victoria followed with 34%, while Western Australia (WA) attracted the least with less than 1%.

Industry Sector Breakdown

• Real Estate: Dominated with 45% of total investment, primarily concentrated in NSW (86% of real estate investment).
• Renewable Energy: Second largest sector, with the acquisition of Pacific Hydro by State Power Investment Corporation (SPIC) as the largest deal.
• Healthcare: Notable growth, with four major deals including Biostime's AUD 1.38 billion acquisition of Swisse Wellness.
• Agribusiness: Emerged as a significant sector with 3% of total investment, reflecting increased interest in food production.
• Mining: Contributed 9% of total investment, with a shift towards non-ferrous metals like gold, lithium, and copper.
• Infrastructure: Notable with the 99-year lease of the Port of Darwin to Landbridge Group for AUD 506 million.

Ownership Structure

• SOEs and Private Investors: SOEs accounted for 49% of investment volume, while private investors represented 48% of the total investment. SOEs dominated the largest deals, with examples including CIC's investments in Investa Office Trust and SPIC's investment in Pacific Hydro.
• Joint Ventures: Only 3% of the investment was through SOE and private joint ventures.

Global Context

• Global ODI Growth: Chinese global ODI in 2015 reached USD 118 billion, a 14.7% increase from 2014.
• Australia's Position: Australia remained the second-largest recipient of Chinese direct investment globally, behind the United States.
• Sector Trends: Investment in services, advanced manufacturing, and technology continued to grow, reflecting a shift towards "quality growth" and middle-class consumption.

Key Information

Methodology

• The dataset is compiled by KPMG and The University of Sydney, covering M&A and joint ventures from entities in the People's Republic of China.
• Real estate investments exclude residential apartment and home sales.
• The database includes investments by subsidiaries or special purpose vehicles in Hong Kong, Singapore, and other locations.
• Deals valued below USD 5 million are excluded due to lack of reliable information.
• The report uses Australian dollars for 2014 and 2015 data to account for exchange rate fluctuations.

Investment Climate Perceptions

• A survey and interviews with Chinese investors and executives highlighted the importance of profit, resource security, brand building, market access, and gaining operational experience as the top motivations for investment in Australia.

Policy and Regulatory Environment

• The Foreign Investment Review Board (FIRB) reduced the mandatory approval threshold for agricultural land purchases to AUD 15 million.
• The sale of S Kidman & Co was rejected due to national security concerns, indicating the sensitivity of large-scale agricultural land sales to foreign investors.

Conclusion

The report underscores the strategic and growing role of Chinese investment in Australia, particularly in real estate, healthcare, and renewable energy. It highlights the increasing activity from private investors and the importance of policy and regulatory environments in shaping investment trends.