China and Australia’s agricultural sector

James Laurenceson, Deputy Director, Australia-China Relations Institute, University of Technology Sydney

1. Australia’s agricultural exports to China reached $8.5 billion in 2014-15.[1] This compared with:

• $5.1 billion to the US
• $3.9 billion to Japan
• $3.3 billion to Indonesia

2. A Chinese government-owned company wanting to invest in Australia’s agricultural sector must obtain Foreign Investment Review Board (FIRB) approval, irrespective of the value of the proposed purchase.[2]

3. A Chinese privately-owned company wanting to buy Australian agricultural land must obtain FIRB approval if the value of the purchase is $15 million or more.[3] This threshold is cumulative.[4] It compares with a non-cumulative threshold of $1.09 billion threshold for investors from the US, New Zealand and Chile, and a non-cumulative $50 million threshold for those from Singapore and Thailand.

4. A Chinese privately-owned company wanting to buy an Australian agribusiness must obtain FIRB approval if the value of the purchase is $55 million or more.[5] This compares with a threshold of $1.09 billion threshold for investors from the US, New Zealand and Chile.

5. In 2013-14, the value of approved Chinese investment in the agriculture, forestry and fishing sector was $32 million.[6] This compares with:

• $602 million for Canada
• $600 million for Hong Kong, China
• $584 million for the US

6. Over the period 2009-10 to 2013-14, Chinese investment accounted for 2.9 percent of total approved foreign investment in the agriculture, forestry and fishing sector.[7] This compares with:

• 19.7 percent for Canada
• 19.6 percent for the US
• 7.6 percent for the UK[8]

7. In 2014, the food and agribusiness sector accounted for 1.5 percent of total Chinese investment in Australia. Since 2010 it has accounted for 2.9 percent.[9]

8. A 2015 poll of more than 1500 Australians[10] on preferences toward foreign investment in agriculture revealed that the public:

• prefer bigger dollar value investments to smaller ones
• are indifferent to whether the foreign company investing is government or privately-owned
• prefer investment from the UK than China, but the difference is small

Author

Professor James Laurenceson, Deputy Director, Australia-China Relations Institute, University of Technology Sydney