We rode on the sheep’s back once, now we need to get onto China’s coattails or “we’ll all be rooned”1.
“In Australia the whole foreign investment story is our history” Lyall Howard, Head of Government Relations at Blackmores, in a nutshell, reminded what many of us know: Australia has always used other people’s money to build our successful country: wool, iron ore, gas and now agriculture. As China beckons and wants to spend its capital, why are we fearful? Our entire wool clip is once again being bought by one country – China is the Great Yarn these days. The time is now or the cycle will be gone.
The Australia China Business Council doesn’t shy away from these tricky subjects and in its “Beyond Buying the Farm – Chinese Investment in Australian Agribusiness” Forum recently, assembled speakers from government, regulator, producers, academics and manufacturers to tell the China story. Andrew Robb AO once again had to say: “Investment into the region is not worth talking about. Australia is doing more business in Dubai than India and Indonesia, and China isn’t much better!”
Australia needs hundreds of billions invested in agriculture to achieve our export goals and farm efficiencies; China has equivalent pots of money ready to invest in the next decade. Come on!
Are Australians really worried about a Chinese takeover as politicians seem to think? James Laurenceson, Deputy Director of the Australia-China Relations Institute, has created some waves, and while the Foreign Investment Review Board panders to those pollies reducing thresholds to appeal to the “significant proportion of the population who think foreign investment should be banned”, Laurenceson’s new research shows that the Australian public is only “mildly concerned” about Chinese investment – more worried about the size of the stake and preferring larger deals, and no more xenophonic about Chinese than other nationalities. “The government should not use [public opinion] as one of their reasons for rejecting deals or lowering thresholds”, he concluded.
“The Opportunity is so profound and so complementary”, Andrew Robb, like a broken record, preached to attendees. So on the other side of the ledger, China, despite its severe pollution and degraded land that will take centuries to fix, is also developing agriculture and needs foreign expertise. An imperative is to protect its consumers, so while clean and green resonates, equally, procedures need to be done correctly and relationships must be nurtured – we can’t just say “I’m Australian and they should be grateful to get our products,” warned Robb.
Getting the right partner (on both sides) is key and a lot less mistakes will be made in doing this – whether is it Chinese coming here or Australians engaging in China. A significant investment in time is required no matter which direction the deal is going.