The TMA National Conference has provided perspectives on Australia-China geo-political relations and the current opportunities for Australians doing business with China.
The view from the panel
- There was consensus that the Australia-China relationship had changed significantly over the last five years.
- The change in the geo-political landscape can be attributed, in part, to changes to China’s domestic policies. Under Xi Jinping, China has made assertive economic and social policies based around its 15-year plan focusing on innovation. John Garnaut noted that there had been a re-framing of the Chinese economy around values of “common prosperity to all”.
- The panellists expect China’s demand for iron ore to decrease due to China’s new economic policies but that there were still significant opportunities for other industries. Tourism is likely to re-bound once Australia opens its international borders.
- Australia and China’s relationship is multi-layered. Businesses need to engage with that environment and to undertake appropriate due diligence. There remains plenty of opportunities for Australian businesses to partner with China.
- China has recently made changes to the operation of its insolvency laws. These changes include judicial recognition of insolvency processes between China and Hong Kong, see our recent publication on that topic here.
Australia continues to be seen by China as an attractive place for inbound investment due to its relatively strong economy and stable political environment.
The panellists were John Garnaut, Senior Risks Advisor, McGrathNicol, Richard Maude, Senior Fellow, Asia Society Policy Institute and Natasha Kassam, Director, Lowy Institute.
Some comments from us
We echo the comments of the panel that Australian businesses must assess and understand the geo-political landscape between the two countries. That is multi-layered and ever-changing in a dynamic, global, marketplace. Like any investment, there are risks that ought be considered. At present Bakers is seeing continued foreign investment from China at lower volumes than at the height of the mining boom, and most of the investments are in non-sensitive sectors and in smaller scales. We expect that investment around this level to continue for some time. Having said that, we note that the Australian government recently approved Shangdong Gold’s acquisition of Cardinal Resources, as well as Peakstone’s acquisition of CBD real estate in Sydney, showing there is still room for inbound investment from China into Australia in sectors where foreign investment is required.
