British media said a new analysis found that Chinese investment in Australia fell by nearly 50% in a year, and the poor relationship between Canberra and Beijing led to a rapid drop in investor confidence.
Chinese investment in Australia fell for the third consecutive year between 2018 and 2019, from a $4.8 billion to a $2.5 billion, according to Australian National University researchers.
According to the report, in the peak year of 2016, Chinese investors invested a $15.8 billion in Australia. Last year's figures were supported by China's a $1.5 billion acquisition of Bellamy foods, a Tasmanian infant formula maker.
Peter dresdale, a professor at the Australian National University, said the decline in investment in Australia was much more severe than the global trend. Globally, Chinese investors' spending fell by 9.8%, compared with 47% in Australia over the same period.
According to the report, most of the about $50 billion invested by Chinese investors in Australia since 2014 were invested before 2017.
According to reports, in 2017, then Australian Prime Minister Malcolm Turnbull proposed to amend Australia's national security law to counter what he called "unprecedented and increasingly complex efforts by foreign forces to influence political processes at home and abroad.". Although China has not been singled out, it indicates the deterioration of relations between the two countries. Relations between the two countries have fallen to new lows in recent weeks.
Dresdale said the sharp decline in foreign investment in Australia compared with the rest of the world shows that there are more factors behind the hesitation of foreign investors in Australia.
"As recent policy changes and actions may be seen as negative signals by Chinese investors, the investment environment may not seem so attractive, and the deterioration of political relations between the two countries has clearly had an impact."
Dresdale said he doesn't think the trend will reverse soon.
"China is the main source of global foreign investment, and Australia relies heavily on foreign investment to develop its economy and strengthen market ties. Now [China's investment in Australia] is shrinking. "