Speeches | 01 March 2013

Observations of Chinese investment in Australia

Last night, the inaugural Lowy Institute-Rio Tinto China Fellow, Professor Zha Daojiong of Peking University, gave a lively presentation on Chinese investment in Australia. Professor Zha is one of China's leading international policy scholars.

The talk touched on some controversial issues in the debate, such as the geostrategic considerations of investment.Professor Zha didn't shy away from the topic of state-owned enterprises either, explaining why they are so poorly understood in China as well as Australia.

Professor Zha also gave food for thought about the direction of the investment relationship, saying it would be useful to see a less eventful relationship with a focus on investor track-record rather than country of origin or ownership structure.

Below are the notes from his Powerpoint presentation.

  • Zha Daojiong

Last night, the inaugural Lowy Institute-Rio Tinto China Fellow, Professor Zha Daojiong of Peking University, gave a lively presentation on Chinese investment in Australia. Professor Zha is one of China's leading international policy scholars.

The talk touched on some controversial issues in the debate, such as the geostrategic considerations of investment.Professor Zha didn't shy away from the topic of state-owned enterprises either, explaining why they are so poorly understood in China as well as Australia.

Professor Zha also gave food for thought about the direction of the investment relationship, saying it would be useful to see a less eventful relationship with a focus on investor track-record rather than country of origin or ownership structure.

Below are the notes from his Powerpoint presentation.

  • Zha Daojiong
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Executive Summary

How new is China’s ‘Go Out’ strategy?
  • Twin of the ‘invite in [investment]’ strategy
  • Extension of outward investment since 1950s
  • WTO membership a policy enabler
An SOE, what is it?
  • Government-owned ≠ government-controlled
  • A corporation, not a bureaucratic unit
  • FDI a corporate initiative, subject to gov’t approval
  • SOE executive held responsible for FDI outcome
Toward a less eventful investment relationship
  • Before the border familiarisation for aspiring Chinese investors
  • More focus on company track record
  • Less focus on country of origin and ownership structure
  • Foster a growing community of Australian and Chinese professionals interested in succeeding in each other’s societies
Why Australia?
  • Resource endowments, geographical proximity
  • Predictable government, clear rules, stable society
  • Value in brand-name building among OECD markets

Investment in China-Australia Relations

  • Fundamentals remain strong
  • FIRB and state regulatory systems a learning process
  • Regional geostrategic dynamics a factor on the horizon?

Toward a less eventful investment relationship

  • Before the border familiarisation for aspiring Chinese investors
  • More focus on company track record
  • Less focus on country of origin and ownership structure
  • Foster a growing community of Australian and Chinese professionals interested in succeeding in each other’s societies