In the 2021 calendar year, Chinese investment in Australia declined by 69.8 percent, from USD 1.9 billion in 2020 to USD 0.6 billion. In Australian dollar terms, the decline is 69 percent from AUD 2.5 billion to AUD 0.8 billion. Based on our accumulated data between 2007 and 2021, a total of USD 110.1 billion has been invested by Chinese companies into Australia.
This report is part of an ongoing series of Demystifying Chinese Investment in Australia reports by KPMG and The University of Sydney.
The report analyses Chinese Overseas Direct Investment (ODI) into Australia in calendar year 2021.
Highlights of Chinese investment into Australia in 2021
Key findings
Chinese investment in Australia declined by
69.8%
from USD 1.9 billion in 2020 to USD 0.6 billion in 2021.
In Australian dollar terms, the decline is
69%
from AUD 2.5 billion to AUD 0.8 billion.
The number of completed transactions almost
halved
from 20 transactions in 2020 to 11 in 2021.
By industry
The mining industry accounted for
70.1%
of the total Chinese investment inflows, which equated to AUD 545 million.
Commercial real estate accounted for
26.7%
of the total Chinese investment inflows, which equated to AUD 208 million.
Renewable energy sector accounted for
3.2%
of the total Chinese investment inflows, which equated to AUD 25 million.
By state
WA received the largest share with
66%
which equated to AUD 511.1 million.
Victoria was in second place with
17%
which equated to AUD 133.6 million.
NSW and SA were in third and fourth place with
13% and 4%
respectively, which equated to AUD 133.5 million.
Chinese investment opportunities
According to China’s Ministry of Commerce, Outbound Direct Investment (ODI) from China remained steady. Europe recorded an increase of 25 percent while Chinese ODI into the United States fell 34 percent. The five dominant target sectors of global Chinese ODI for 2021 are Energy, Transport, Consumer-related industries, Metals and Mining, and Logistics.
Despite the decline in the number of completed transactions in 2021, Australia overall remains the second largest recipient country behind the United States for accumulated Chinese investment during the period from 2005 to 2021.
The global context
From a global perspective, preliminary data released by the United Nations Conference on Trade and Development (UNCTAD) in January 2022 showed a 77 percent increase in global Foreign Direct Investment (FDI) in 2021. After falling below USD 929 billion in 2020, global FDI bounced back to USD 1.65 trillion, surpassing the 2019 pre-COVID-19 level of USD 1.5 trillion.
Came in first place as the largest recipient country of global FDI was the United States with a total of USD 323 billion. China came second with a total of USD 179 billion according to UNCTAD data. ASEAN countries led FDI growth in Asia with FDI inflows up 35 percent.
