China Buys Up Australia’s Largest Cotton Producer

Chinese buy up big in Australia (Sydney Morning Herald, Sep 3, 2012):

CHINESE investment in Australia almost doubled last year as the world’s second-largest economy flexed its economic muscles abroad, according to new data from the Ministry of Commerce.

Recent Chinese investment in Australia includes the sale of Australia’s largest cotton producer, Cubbie Station, to a Chinese-led consortium, approved by the Foreign Investment Review Board on Friday.

Chinese companies – both private and state-owned – invested a total of $3.2 billion in Australia in 2011, an 86 per cent increase from 2010. Australia is the third-most-popular investment destination behind the European Union and the ASEAN countries.

The total Chinese overseas investment increased by a modest 8.5 per cent to $US74 billion ($71 billion) last year as the deteriorating global situation put a brake on its rapid expansion. Previously, Chinese investment expanded by 45 per cent every year between 2002 and 2011.

In the field of mergers and acquisition, the mining industry remains a hot favourite for Chinese investors, followed by manufacturing, electricity generation and logistics.Chinese investment activities expanded again for the first seven months of this year in the non-financial sector, increasing to 53.8 per cent from a year earlier. Most went to the ASEAN countries and the US, which represented 36 per cent and 30 per cent of the total capital outflow respectively.

A senior trade official, Shi Ziming, said the Chinese private companies were likely to lead the next wave of Chinese investment abroad despite the present dominance of state-owned enterprises. Private companies accounted for more than 50 per cent of Chinese investment abroad last year.

”Private enterprises will definitely play a more and more important role in the process of the nation’s outbound investment activities,” Mr Shi said.

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