Top Chinese diplomat Liu Jianchao has called for a revision of Australian policies impacting Chinese investments in his speech to the Australia China Relations Institute (ACRI) at Sydney’s UTS on Tuesday night.
He emphasized the need for clarity in Australia's stance, highlighting how bans and rejections have dampened Chinese investment enthusiasm.
Liu, who heads the Communist Party’s International Department, voiced concerns over the declining Chinese investment in Australia. Citing the Huawei ban and other investment rejections as key factors, Liu urged a rethink in the wake of improved political ties.
The Australian market has witnessed a notable decrease in Chinese investment, attributed to perceived overemphasis on security concerns. This trend, as detailed in a recent University of Sydney and KPMG report, reveals a significant drop from US$16.2 billion in 2016 to just US$1.4 billion in 2022.
Impact on rare earths and critical minerals sectors
Former trade minister Andrew Robb highlighted the deterrent effect on Chinese investors, who now prefer markets like Africa and the Middle East. The rare earths and critical minerals sectors in Australia also remain areas of uncertainty for Chinese investors.
In February this year, federal Treasurer Jim Chalmers blocked a Chinese fund from increasing its stake in rare earths company Northern Minerals, citing national interest grounds.
Liu stressed the importance of bilateral business cooperation, urging adherence to market and World Trade Organization rules. He called for a reevaluation of investment policies, suggesting that improved political relations could foster enhanced economic collaboration.
This sentiment is echoed by Hans Hendrischke, Professor of Chinese Business and Management, who noted the need for clear and confident investment policies.
James Laurenceson, director of the Australia China Relations Institute, concurs with Liu’s views, underscoring the potential benefits of Chinese investment, particularly in critical minerals and technology sectors. He advocates for a balanced approach that safeguards national security while avoiding overly restrictive measures that could hinder economic growth.