Overseas State Owned Enterprises (SOEs) have made a significant contribution to the growth of the Australian economy in the past decade. Without the equity and debt, in particular, Chinese SOEs have arranged and invested in Australia’s largest gas and mining projects, many would not have proceeded.
For many years, Australia has enjoyed positive experiences with SOE investment from major trading partners, including Japan, South Korea, Singapore and USA, but our experience with Chinese SOE investors is relatively new. Over time the economic contribution, coupled with positive market behaviour and integration into local society have been important factors for foreign SOEs gaining public support and trust. There is a time and trust equation at play: the longer Australia interacts with foreign investors, the less concerned or resistant we appear to be.
For Australia to attract Chinese SOE investment on a sustainable basis in an increasingly competitive environment, we must better understand their operations, motivations and aspirations. Australian governments, companies and communities must continue to work together to ensure that our policies and regulations are welcoming, globally competitive and consistently applied for all foreign investors, while addressing the associated risks. Chinese SOEs need to work harder at demystifying their investment intentions, communicating with Australian constituents, and integrating with our society.
The Business Council of Australia has released a Discussion Paper on Foreign Investment and State-owned Enterprises: Managing the Risks to Maximise the Benefits that draws on the findings of the report commissioned by the BCA and undertaken by KPMG and the University of Sydney.
We are proud to share with you the full report series, Demystifying Chinese Investment in Australia.