Earlier today (8/4/2024), The University of Sydney Business School and KPMG published their ‘Demystifying Chinese Investment in Australia (April 2024) report‘ (Report) into Chinese investment into Australian businesses. If you are a lawyer with a practice focus on inbound Chinese investment, the Report makes for very sobering reading:
- Chinese investment in Australia fell 36 percent to AU$1.34 billion in 2023
- This represents the second lowest year in investment value since 2006
- Only 11 corporate transactions between the two countries were recorded in this period
The Report covers the period January to December 2023, only relates to corporate (not individuals) and excludes Hong Kong and Macau investment in Australia (i.e. Mainland China only).
Nonetheless, the Report reads bleak – particularly given how many law firm practices here in Australia rely on this type of work to survive.
Any positives?
So, are there any positives in the Report to write home about?
- Healthcare was a big winner – accounting 42 percent of the total Chinese investment into Australia – although it should also be said, their accounted for two transactions totaling AU$562 million.
- Agribusiness had a big bounce – representing a 21 percent increase in value through to A$283 million. Again though, this was through two deals!
- Mining was the big loser with a significant decrease from A$1.8 billion in 2022 to A$34 million in 2023!
Anything else?
- With a whopping 82 percent of total investment into Australia, NSW is the home of the largest share of Chinese investment – A$1.01 billion. Victoria accounted for 16 percent followed by WA with a mere 2 percent. Have to wonder what that means for Queensland
As I said at the start, all in all not a great read if you are an Australian lawyer looking for new business out of China. One ray of hope is that investment from privately owned enterprise saw a slight uptick in 2023 – up from A$641 million in 2022 to A$878 million. I suspect a large part of this would have been in property related transactions, because if it wasn’t the Australian-based property lawyers out there with Chinese clients seriously need to think about pivoting their practice!
As always, get in touch if you want to talk through any of the above.