KPMG: Australia Shouldn’t Be Concerned About Chinese Investments

By Kalen Smith, Big4 Blogger

Chinese businesses are continuing to expand into new businesses throughout the world. State owned enterprises are expanding their reach into Australia. Australian government officials have raised concerns over their intentions.

Members of the Australian Liberal party have shown the most resistance as Chinese enterprises purchase Australian assets. The head of the Liberal party advocates laws that would prohibit a Chinese company from fully purchasing an Australian company or fund of assets.

A report from KPMG said that these actions should not be a concern. Many nations have painted the Chinese expansionists as a mysterious group of foreigners with unknown intentions. KPMG analysts state that isn’t the case at all. They argue that Chinese state owned enterprises are driven by the same motives as their western counterparts and operate in the same capacity as other international corporations.

KPMG said that Australian policy makers should also follow data on where Chinese capital is being allocated. Many enterprises and officials have raised concerns about food security, but agricultural investments make up a small fraction of Chinese investments in Australia. Four-fifths of all Chinese investment is allocated into the mining industry.

Data indicates that Chinese foreign investment has grown considerably in the past few years. They still trail the United States and the United Kingdom in terms of the amount of investment they make into foreign businesses.