China Farm and Land Grab Not the Reality – Australia Needs an Educated Debate In Order To Seize the Opportunity 

April, 2014 - Minter Ellison - Australia

With food and nutrition key issues for growing markets such as China, investment in Agribusiness is about supporting Asian partner objectives to grow "safe food" and "harvest protein", according to Adam Handley, President of the Australia China Business Council (WA) and a senior partner at law firm Minter Ellison.  Speaking at the West Australian Government-organized “Investing and Growing Together” Agribusiness Cooperation Conference today, Mr Handley noted that the myths of China snapping up large tracts of agricultural land and buying large numbers of agricultural businesses need to be dispelled.


“The facts are there for all to see. China ranks around 9th as a foreign investor in agriculture in Australia; with the USA controlling more than 10 times the foreign investment stock than China.


"Moreover, Chinese investors own less than 1% of Australian farming land and agri investments are less than 2% of total Chinese investment in Australia," he said.


Drawing on 25 years of experience of doing business with Asia, Mr Handley emphasized that it is important that Australia does not take for granted that China would “invest only on Australia’s terms”.


There are more than 120 countries in the world that count China as its largest trading partner. While Australia has some natural competitive advantages, many Australians tend to overstate those advantages. Other countries, including countries like New Zealand, which enjoys a Free Trade Agreement with China, are strong competitors to Australia.


Focusing on opportunities in Western Australia, Mr Handley noted that Chinese investment in agriculture in that state is in its infancy; with Western Australia receiving only 5% of total Chinese investment in Australian agriculture between 2006 and 2012.


He pointed out that the opportunities for Western Australia are significant if Western Australia can manage engagement with China effectively.


In this context, Mr Handley said it is very promising to see the State Government, through the Department of Food and Agriculture WA, put significant efforts into assessing Western Australian opportunities where Asian and Chinese investment can complement West Australian businesses.


“The State Government has established several key initiatives, including a Government-led Agri-Business Alliance with industry to identify 'invest ready' proposals that can be introduced to Asian investors,” he said.

 


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