'Reputation at risk': China slams Australia after $1.6b 'nosedive'

·News Reporter
·3-min read

China has hit out at Australia over its hypocritical trade practices, calling for "serious" reflection from Canberra on the "practical problems" Sino-Australian relations face.

On Monday, China's Foreign Ministry spokesperson Wang Wenbin was pressed on a report from Australian National University's Chinese Investment in Australia Database that revealed his country's investment Down Under had plummeted by more than 61 per cent last year.

Mr Wang laid blame solely on Canberra, telling reporters the economic downturn was a result of the government's "excuses".

"In 2020, while China's outward direct investment (OFDI) grew by 3.3 per cent, China's investment to Australia took a nosedive, a contrast that deserves some serious thoughts by the Australian side," he warned.

Wang Wenbin accussed Australia of hypocrisy on Tuesday evening. Source: FMPRC
Wang Wenbin accussed Australia of hypocrisy on Monday evening. Source: FMPRC

Why Chinese investment in Australia has declined

Blocking Chinese investment in Australia has been one of Beijing’s many grievances with Canberra in recent years, and was included in a 14-point dossier handed to Nine Newspapers by an unnamed Chinese diplomat in November.

In June, the federal government announced it would tighten rules on foreign investment, while in December new legislation meant it could veto foreign deals at state level it believed were at risk to national security.

Yet Mr Wang suggested Canberra's position was hypocritical.

"In recent years, the Australian side has repeatedly used 'national security' as an excuse to veto Chinese companies' investment projects, and arbitrarily imposed restrictions on normal exchanges and cooperation between the two countries in various fields, which has seriously dampened the confidence of Chinese investors," he said.

"Such practice of politicising economic and trade issues runs counter to Australia's self-proclaimed commitment to market rules and the principle of free competition, and puts Australia's own interests and reputation in jeopardy."

The Australian National University data shows Australia recorded just more than $1 billion of investment from China in 2020, down from $2.6 billion the previous year.

Canberra and Beijing have repeatedly clashed over Chinese investment in Australia. Source: Getty
Canberra and Beijing have repeatedly clashed over Chinese investment in Australia. Source: Getty

Almost all — 86 per cent — of that investment came from Chinese firms established within Australia, and did not come directly from foreign firms.

The director of the East Asian bureau of economic research at the ANU, Shiro Armstrong, says it is evident foreign investment has been subjected to more scrutiny in recent years.

"It reflects the effects of COVID but also more scrutiny of foreign investment by the Australian government," Dr Armstrong said.

The drop takes Chinese investment to the lowest point in the past six years and follows a 47 per cent drop in 2019.

Investment restrictions key to fallout

Investment has been a key component of the China-Australia fallout, with the blocking of Huawei's 5G rollout, while Victoria's Belt and Road Initiative agreement has been heavily scrutinised by the federal government.

Other clashes have arisen due to Australia's vocal stance on what China calls internal matters, including internment camps in Xinjiang, and the introduction of a national security law in Hong Kong.

Australia was slapped with a series of trade sanctions in 2020, targeting key exports such as beef and wine.

While widely perceived as a form of punishment by China, Beijing has repeatedly denied such a move was political.

Beijing has been accused of a similar tactic this week against Taiwan, when it banned the importation of Taiwanese pineapples, citing "harmful creatures" for the decision.

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