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Su-Lin Tan

Chinese investments in Australia’s renewable energy sector have risen, even as total foreign investments from China remained subdued, a new report from KPMG and the University of Sydney has shown.
Australia’s latest Chinese foreign investment report – “Demystifying Chinese Investment in Australia” – showed that 12 per cent of Chinese funds invested in Australia in 2022 went to renewable energy projects.
This amounts to about US$170 million, up from US$19 million in 2021. In 2021, renewable energy investments accounted for just over 3 per cent of total Chinese investments.
Before 2021, there had been no or little renewable energy investments by Chinese investors.

In total, actual Chinese investments in Australia for 2022 rose just above US$1.4 billion but remained one of the lowest levels of investments in years, the report stated.
“2022 is an improvement on 2021 but remains the second-lowest year of Chinese investment since 2007 and shows a continuing trough in the cycle,” the report said.
Chinese investment of US$1.4 billion in 2022 is a significant increase from US$585 million in 2021, the lowest since 2007.
It aligns with more recent data from the Australian foreign investment review board that has indicated more Chinese are applying to invest in the country.
Chinese investments in Australia rose to a high of more than US$16 billion in 2008 and remained strong until 2017, when bilateral relations started to sour.
Chinese investment in Australia up, but US still leading foreign investor
China and Australia’s relationship is on the mend after plummeting to a low in 2020 when then-prime minister Scott Morrison angered China by unilaterally calling for an international probe of Covid-19, seen as an effort to pin blame on the mainland.
Various Australian ministers have made their first visits to China in recent months, with bilateral repairs potentially lifting Beijing’s restrictions on some Australian trade and ramping up Chinese foreign investments in Australia.
In 2022, China Baowu Steel Group’s US$1 billion funding of the Western Range iron ore joint venture project in Western Australia with its long-term partner Anglo-Australian miner Rio Tinto, accounted for the lion’s share in Chinese investments that year.
The two companies said last year that their partnership had been a “win-win” as they continued to work on other projects such as climate-action research on low-carbon steelmaking.

Mining deals accounted for 86 per cent of Chinese investments in 2022, according to the report by KPMG and Sydney University.
Property once dominated the Chinese investments in Australia but in 2022, only 1 per cent of Chinese capital went to property, in this case, commercial real estate, the report added.
Chinese investments in Australia have declined over the years, first as a result of curbed outflows of Chinese capital, then as Australia stepped up measures to slow foreign property ownership, followed by Beijing’s pandemic lockdowns and border closures.
Now, relatively lower investment returns from the Australian market, given increasing costs of land and financing and construction, are also deterring Chinese investments in Australia commercial property, the report said.
The report also highlighted a trend of Chinese investments veering to the Middle East, Latin America and Asia, resulting from Belt and Road Initiative expansions.


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A report from Australia shows that 12 per cent of Chinese funds invested in Australia in 2022 went to renewable energy projects, up from some 3 per cent in 2021
Overall Chinese investment in Australia for 2022 rose just above US$1.4 billion but remained one of the lowest levels of investments in years


Australia’s latest Chinese foreign investment report shows that 12 per cent of Chinese funds invested in Australia in 2022 went to renewable energy projects, up from some 3 per cent in 2021.
