(Bloomberg) --
China's investment in Australia plunged to a record low of A$1 billion ($775 million) last year, according to data compiled by The Australian National University, as relations between the two countries soured amid the pandemic.
Investment by Chinese companies Down Under fell 61% in 2020, following a 47% fall in the prior year. This was the lowest level of activity in the six-year history of the data that's part of the ANU's Chinese Investment in Australia Database. The number of projects recorded was only 20, well down from a peak of 111 in 2016 when investment amounted to A$16.5 billion.
Relations between the two nations deteriorated last year after Prime Minister Scott Morrison led calls for an independent probe into the origins of the coronavirus and saw China hit products from barley to wine to lobsters with tariffs, anti-dumping probes or delays at port. Separately, Australia tightened investment-screening arrangements with foreign powers.
The dip “reflects the effects of Covid but also more scrutiny of foreign investment by the Australian government, particularly that from China,” said Shiro Armstrong, Director of the East Asian Bureau of Economic Research at the ANU in a release Monday.
Laws passed in December give Australia's foreign minister the power to stop signed agreements between overseas governments and Australia's eight states and territories, and with local authorities and universities.
Armstrong said that 86% of the investment in 2020 was from Chinese companies already established in Australia and was limited to the real estate, mining and manufacturing sectors.
“In 2020, the year of Covid-19, foreign direct investment fell globally by 42% according to the United Nations,” said Armstrong, noting the UN data are measured differently to the CHIIA dataset. The UN data recorded total foreign direct investment to Australia fell 46% last year.
©2021 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
