Foreign investment rule changes comes in the wake of the controversial approval of the lease of the Port of Darwin to Chinese investors. (Photo: Fairfax Media)
Chinese investments nearly doubles after FIRB approves $46.6 billion in 2014/15
by Su-Lin Tan
Chinese investors are planning to spend $46.6 billion, according to the 2015 Foreign Investment Review Board annual report issued on Friday, nearly twice as much the amount pledged in 2014.
In 2014 China shot past the US for the first time, after agreeing to spend $27.7 billion.
But Chinese investors has since kept up the pace of their interest in Australia, leaping ahead of the US in 2015 by more than $20 billion in agreed spending. Approved US investments in 2015 totalled $25 billion.
Once again, real estate investments made up the bulk of Chinese investment plans with a total of $24 billion. This is twice as much as the amount approved in 2014 which was $12 billion.
To date, Chinese investors have doubled their investments in real estate in both the 2014 and 2015 years.
The biggest change however is the amount of money Chinese investors plan to spend in the agriculture, forestry and fishing and finance insurance sectors.
Chinese investors will spend nearly $2.5 billion in agriculture and $1.7 billion in financial assets. In 2014, those were numbers were $32 million and $51 million respectively.
The increase in investments by foreign investors have raised concerns about national security.
Following the leasing of the Port of Darwin to Chinese company Landbridge, which has links to the People's Liberation Army, FIRB enacted an amendment to the Foreign Acquisitions and Takeovers Regulations on April 4 to remove the exemption for private foreign investors investing in critical infrastructure assets.
FIRB will now formally review the sale of state-owned infrastructure assets to private foreign investors.
"While we welcome foreign investment in Australia it is imperative that critical infrastructure sales are scrutinised to ensure any potential national security risks can be addressed," Federal Treasurer Scott Morrison said.
"These new measures reflect the Turnbull Government's policy to be open, transparent and sovereign in foreign investment decisions."
Concerns also loomed over the iconic Kidman & Co which owns 100,000 square kilometres of land across Australia but that sale has now been resurrected and likely to be chased by two Chinese groups GLAM with a bid as high as $370 million and Pengxin offering $350 million, sources have said.
Following security-related concerns that NSW poles and wires TransGrid would be sold to the Chinese utility, a Middle East and Canadian-dominated consortium won the deal at $10.3 billion last year.
Singapore, Japan and Canada will also join China and the US as the top five biggest foreign investors for 2015.