Australians have expressed mixed views about Chinese investment. The ninth annua

Question

Australians have expressed mixed views about Chinese investment. The ninth annual Lowy Institute Poll 2013 showed that 57% Australians considered that the Australian Government is allowing too much investment from China. This public attitude has been largely unchanged since 2010. On the other hand, several recent reports suggest that Chinese investment in Australia is only about 3% among all the foreign investment by the end of year 2012, and Australia should embrace more Chinese investment. What are the micro-level drivers for Chinese outbound investments in Australia’s agriculture and agribusiness sectors?

Explanation / Answer

Ans. Let me start with this answer straightaway.

You must be aware that China have been following a policy of Increased Foreign Investment for a long time now. In this answer we'll discuss about the Micro Level factors or drivers of Chinese outbound investment in Australia's Agriculture and Agribusiness Sector. Some of them are discussed below :

1) Food Requirement in China - Preference of Chinese Population is Changing to more improved dietary consumption habits and Australian Farming had seen s shift from Food Security to Food Safety. Hence China is willing to invest in Australian Agribusiness to help it's own natives.

2) Private Companies Investment - A large amount of Chinese Investment is by Private Companies and they see a lot of potential in Australia's Agribusiness and Agricultural sector to become more and more rewarding and profitable .

3) Fertile Grounds of Australia - Land of Australia is very fertile and ideal for Agriculture Business and Moreover People of China have developed a very strong taste for Australian Food Products. They usually trust the Products of Made in Australia.

4) Feeding a very huge population - We know that China is more focused on Secondary and Tertiary Sector. So in order to meet the requirements of a very huge population , China is investing in Australia's Agriculture Sector.

5) Benefit of Chinese Companies - However , Australian people are not very happy about the Chinese Companies buying agricultural lands in their country but in certain ways , it is helping Australia too. Sharing of Technology , Skill and Manpower is also taking place between both the countries. China is also taking advantage of Australian Technology , Skills of people , exemptions of Taxes etc.

6) Rising income of Chinese Middle Class - As China is rapidly growing , there is a rise in income of Middle Class people in China. This has led to increased demand for Imported Quality Foods. The this factor Induces Investment in Australian Agriculture business.

7) Land Scarcity - China is having limited Agricultural Land and that's also degrading , so in order to keep itself self sufficient in terms of Food Grains It is focusing more on Agricultural Investment in Australia.

These are some of the micro level drivers for Chinese Investment in Agricultural Sector of Australia.

I hope this answer is clear to you. Do ask in case of any doubts.

Best of Luck !! Keep Chegging !!

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