SYDNEY, May 7 (Reuters) – New Chinese investment in Australia fell by almost 50% in the year to the end of June 2019 as Beijing tightened control over money flowing abroad, an Australian report showed on Thursday.
The decline to A $ 13.1 billion ($ 8.4 billion) was due to “China’s internal domestic policy settings including increased outward investment oversight and tighter capital controls,” said Chairman of the Foreign Investment Review Board David Irvine.
Irvine, former head of Australian intelligence, said the downward trend in investment by China, which is Australia’s largest trading partner, can be seen globally.
However, in 2018/1919 there were tensions over allegations of Chinese interference in domestic affairs and an effective ban on Huawei from Australia’s 5G network.
Australia has tightened rules to allow it to veto foreign investment in important infrastructure on the grounds of national interest, and limit foreign purchases of residential property.
Irvine said he visited Beijing in September to hold a briefing on regulations for potential investors, while the Australian government said its foreign investment regime was not discriminatory.
The FIRB said in its annual report that it would work with the Ministry of Industry to screen foreign investment in rare earth, a new category of critical mineral projects.
While the number of mainland Chinese investment approvals fell 1,915 to 4,901, with the value down 45% to AU $ 13.1 billion from AU $ 23.7 billion to the lowest level since 2016, Hong Kong investors entered property in Australia.
Approval for real estate investment from Hong Kong reached A $ 9.3 billion in 2018-19, up from A $ 2.8 billion, the FIRB report, presented in parliament, showed.
The United States remains the largest approved source of investment in Australia, while China dropped from second to fifth, behind Canada, Singapore and Japan in 2018-2019.
Approval of US investment rose to A $ 58.2 billion from A $ 36.5 billion in the period, mainly due to Walt Disney Corporation’s acquisition of Twentieth Century Fox’s business.
Overall, foreign investment applications increased by A $ 67.9 billion to A $ 231 billion, with only one application being rejected.
Hong Kong’s CKI Group’s bid of A $ 13 billion for the APA Group gas pipeline company was rejected in November 2018 by Treasurer Josh Frydenberg on grounds of national interest.
The report said the European Union, Britain and New Zealand had strengthened foreign investment rules citing national interests in the past 18 months.
The Australian Government said in March that the FIRB would assess all foreign investment proposals as temporary measures during the coronavirus pandemic. ($ 1 = 1.5540 Australian dollars) (Reporting by Kirsty Needham; Editing by Alexander Smith)
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