Chinese investment welcome: Australian NSW Premier

17  January 2013

SYDNEY — The Premier of New South Wales, Barry O’Farrell has declared NSW as a welcome and willing destination for Chinese investment at a time of intense political debate at the level of foreign investment in Australia.

Speaking at the Sydney China Business Forum on Tuesday, O’Farrell said the state was ‘well-placed to build on its strong trade and investment partnership with China’ and to take advantage of increasingly diversified outbound Chinese investment.

He referred to an updated KPMG – University of Sydney ‘Demystifying Chinese Investment’ report – first released on the Premier’s recent trade mission to China.

NSW, Australia’s most populous state, has been at the forefront of Australia’s rigorous engagement with China, this year celebrating its 40th anniversary of official diplomatic ties.

“China’s economic growth is creating exceptional opportunities for greater engagement between Australian and Chinese public and private organizations, and educational institutions,” O’Farrell said.

Australia and New Zealand Banking Group Ltd chief executive Mike Smith last week said that Australia’s “defensive and suspicious” approach to its relationship with China could see the country miss out on much-needed investment.

“We have to understand as Australians that capital goes where it’s welcome,” Smith said.

Premier O’Farrell told a packed Audience at Parliament House in Sydney, that while there has been tens of billions of dollars’ worth of Chinese investment in Australia in recent years, ‘the nature of this investment is not widely understood’, particularly its’ potential for diversification beyond mining and energy.

China has been driving growth in NSW and its influence is particularly evident in Sydney, where Chinese culture from Chinatown to the Sydney Film Festival is enthusiastically embraced.

NSW’s goods exports to China have more than doubled in just three years hitting well above $5 billion, according to the office of the NSW State Treasurer Mike Baird.

China is the state’s biggest trading partner. Over the last 12 months, one quarter of goods imports to NSW came from China, while over 13 percent of NSW goods exports now go to China, a 6 percent increase from the first quarter of 2009. In 2009-10, bilateral trade with China was valued at $22 billion.

In its second year, the Sydney China Business Forum is focusing in 2012 on investment and infrastructure opportunities between China and Australia, at a time when resource-rich Australia is seeking capital to drive growth and Chinese investors begin to seek further engagement with global investment opportunities.