Chinese companies may shift their focus from resource acquisitions in Australia to direct investments in building ports, railways and wind farms, said Stuart Fuller, managing partner at Australian law firm Mallesons Stephen Jaques.
Chinese investment will broaden into areas such as clean energy, technology and infrastructure as part of China’s 2011- 2015 economic plan, Fuller said.
China’s acquisitions in Australia have grown from $186 million in 2005 to $5 billion this year so far, according to Bloomberg data. Canada is the top foreign acquirer in Australia with $10.4 billion worth of deals, with the U.S. following with $10.3 billion. Sydney-based Mallesons met with Chinese companies in Beijing this week to discuss investing in Australia.
The companies, which Fuller declined to name, raised concerns about their treatment by the Australian Foreign Investment Review Board and the approval process in the country.
China Non-Ferrous Metal Mining Co. dropped a proposal to buy a majority stake in rare earths metal producer Lynas Corp. after the review board blocked the deal last year.
The Chinese perception is that it’s more difficult for Chinese investors to win approval than those from other countries, Fuller said.
Australian rules “apply equally to any investor,” he said.
Uncertainty over the implementation of a new mining tax, and disputes between states and the federal government in Australia over royalties, may deter Chinese investors who can look to Africa and South America to acquire mineral and energy deposits, according to Fuller.
“Investors like certainty,” he said.
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