Chinese fund to splash $3bn on Australian agriculture

Medium_china-aussie
Australian Agriculture Minister Barnaby Joyce tours a Chinese food factory after telling farmers they have nothing to fear from an FTA with Australia. (Photo: Wang Jianxin)
Note from the editors: Beijing Agriculture Investment Fund is owned by Beijing Agriculture Investment Co., which was established by the Capital Group in December 2008 with the investment and authorisation of the Beijing Municipal Government.

Weekly Times | 15 September 2014

Beijing Australia Agricultural Resource Cooperative Development Fund to focus on dairy investment

by Simone Smith

DAIRY investment in Australia will be the focus of a $3 billion Chinese agricultural fund, announced today.

The Minister for Trade and Investment Andrew Robb told the inaugural Australian Dairy Farm Investment forum about the deal, to be signed today in Melbourne.

Called the Beijing Australia Agricultural Resource Cooperative Development Fund it will be jointly initiated by the Beijing Agricultural Investment Fund and Yuhu Agriculture Investment Pty Ltd.

The new joined fund is aiming to focus on the investment of Australian Dairy, particularly infant formula, beef, lamb, seafood and other agriculture products.

It is planning to invest $3 billion capital in various projects in Australia.

The fund will supply Australian agriculture products and services to the people of China.

It will reinforce foreign investments between the two nations and provide a new stage for its cooperative trade opportunities.

Beijing Agricultural Investment Fund was founded in September 2009 and was the first professional investment fund in the agricultural industry in China.

It was initiated by state-owned Beijing Capital Group.

It owns and manages 25,000 premium cattle in five farms around China and supplies milk to the leading Chinese dairy manufacturing and distribution companies such as listed Yili Group, Mengniu Group, and state owned Sanyuan Group.

Yuhu Agriculture Investment Pty Ltd is a foreign subsidiary of Yuhu Group which is a large scale investment company based in Shenzhen China.

It is involved in property development and management, hydropower station development and trade logistics.

In the past two years, the Australian arm has gained adequate knowledge on foreign investment, and is now moving to the prosperous agriculture industry with the high demand from Chinese market.


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The Australian | 16 September 2014

Chinese fund to splash $3bn on Australian agriculture

by Sue Neales and Scott Murdoch

CHINESE investment in Aus­tralian agriculture is set to boom, with the Chinese-government owned Beijing Agricultural Investment Fund yesterday committing to spend $3 billion on Australian dairy, beef, lamb and aquaculture assets.

The announcement, witnessed by federal Trade Minister Andrew Robb in Melbourne, ­establishes the Beijing Australia Agricultural Resource Co-operative Development Fund in a joint venture with Yuhu Agriculture Investment.

Mr Robb told the inaugural Dairy Australia Investment forum that the fund was particularly keen to invest in local dairy farms and dairy processing, with a focus on producing and exporting powdered infant milk formula to China.

In a separate move, it was also revealed that a private Chinese company had bought the vast ­Elizabeth Downs cattle station in the Northern Territory from ­National Gallery of Australia president and leading barrister Allan Myers QC.

With the Chinese bidder paying about $12 million for the 205,000ha of land, the deal will not require sign off by the Foreign Investment Review Board, as it falls below the $15m mandatory approval threshold.

The Chinese company also bought the 9000 head of cattle on Elizabeth Downs, located two hours’ drive southwest of Darwin, for an estimated $7m.

It is believed to be the first investment by a Chinese buyer in the northern Australian cattle industry, with Asian demand for beef expected to jump in the near future with the opening this month of a $91m abattoir near Darwin.

However, it is understood the buyer of Elizabeth Downs, who owns golf courses and hotels in Australia, hopes to maximise the property’s investment potential by developing irrigated cropping and tourist facilities alongside the cattle operation.

The moves came as Barnaby Joyce told Chinese producers that Australia’s farmers would pose no threat to their livelihoods if the two countries were, as expected, to sign a free-trade agreement by the end of this year.

Mr Joyce, on his first tour of China as Agriculture Minister, is leading a delegation of almost 40 industry figures who stand to bene­fit if an agreement is signed.

In Harbin, in China’s northeast, yesterday for the start of his tour, Mr Joyce said Australia could never become “Asia’s food bowl” simply because of the size of each nation’s population.

“We are not a threat to China; we will produce premium products to the people of China and they can be reliant on the fact that Australia does not have a hope in Hades of feeding the Chinese population, not even a portion of it,” he said. “If we were to use all of our production, we could not feed just Australia and this province alone, we would run out of food.

“The reality is that Australia feeds about 60 million people at the moment (including exports). Even if we double that to 120 million people, we would not feed even half of the population of our nearest neighbour, Indonesia.
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