In 2022, Chinese investment in Australia increased by 142.7 percent, from US$0.6 billion in 2021 to US$1.4 billion. In Australian dollar terms, the increase is 170.2 percent from AU$0.8 billion to AU$2.1 billion. 2022 remains the second lowest year of Chinese investment since 2007 and shows a continuing trough in the cycle.
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 2022.
Highlights of Chinese investment into Australia in 2022
Chinese investment in Australia increased by
from US$0.6 billion in 2021 to US$1.4 billion in 2022.
In Australian dollar terms, the increase is
from AU$0.8 billion to AU$2.1 billion.
Between 2007 and 2022,
in total was invested by Chinese companies in Australia.
The mining industry accounted for
of the total Chinese investment inflows, which equated to AU$1.8 billion.
Chinese investment in commercial real estate continued to drop, to
with 2 completed transactions.
Renewable energy sector accounted for
of the total Chinese investment inflows, which equated to AU$259.3 million.
WA received the largest share with
which equated to AU$1.6 billion.
NSW was in second place with
which equated to AU$264 million.
QLD and SA were in third and fourth place with
9% and 1%
respectively, which equated to AU$213.8 million.
Chinese investment opportunities
China’s official statistics for Chinese outbound direct investment in 2022 show a 2.8 percent lift to US$116.9 billion, reflecting a continuing gradual recovery from the lows of 2019–2020, but at a level that is still below 2018.
China’s National Bureau of Statistics’ ranking of outbound direct investment by industries in 2022 shows that deals in the Leasing and Business Services sector were in the top position with 33.2 percent of total annual ODI, followed by Manufacturing with 18.5 percent, and Wholesale and Retail with 18.1 percent. The strongest growth from 2021 is recorded for Wholesale and Retail (19.5 percent), Manufacturing (17.4 percent), and Construction (14.9 percent). Mining occupies a small share with 4.3 percent of total ODI and an increase of 0.6 percent in 2022.
Historically, Australia remains the second largest recipient country behind the United States for accumulated Chinese ODI.
The most obvious trend in the flow of large Chinese investment projects is the shift toward countries in the Middle East, Latin America, and Asia, which are associated with the Belt and Road Initiative (BRI).
As we recover from COVID and the Australia-China bilateral relationship stabilises, some Chinese investors start to explore investment opportunities in Australia again. Based on the strong economic and trade ties between the two countries, many sectors in Australia, such as mining and renewable energies, offer appealing opportunities for Chinese investors, who still consider Australia a comparatively secure and stable investment destination among developed nations.
The global context
The UNCTAD 2023 Global Investment Trends Monitor published in January 2023 notes that ‘the multitude of crises on the global stage – the war in Ukraine, food and energy prices, financial turmoil and debt pressures – inevitably affected global foreign direct investment (FDI) in 2022’ and that ‘new investment project numbers, including greenfield announcements, international project finance (IPF) deals, and cross-border mergers and acquisitions (M&As), all shifted in reverse after Q1’. The annual figures for 2022 will only be published mid-year in the World Investment Report 2023.