Political tensions between Australia and China have led to the collapse of Beijing’s investment in the economy of the largest country in Oceania, which is at its lowest level in 15 years. This is indicated by a new report prepared by the multinational consulting services firm Kpmg and the University of Sydney. In fact, in 2021, Chinese companies invested only $585 million in Australia, a sharp drop compared to $16.2 billion in 2008. Investments from the People’s Republic of China began to decline in 2017, exactly coinciding with the first cracks in bilateral relations. If between 2014 and 2017, China invested more than $40 billion in Australia (making the ocean nation one of the largest recipients of Chinese investment in the world), the figure dropped dramatically between 2018 and 2021 to $11 billion.
This is an obvious strategic choice by Beijing, since according to official government data, foreign direct investment to China did not decrease in recent years, but actually increased in 2020 and 2021. Relations between the two countries reached their lowest levels in 2020, after Australia banned Huawei from a tender to build a national 5G network and called for an investigation into the World Health Organization (WHO) into the origins of Covid-19 and alleged cover-ups by Beijing. China responded by blocking the import of a wide range of products and raw materials from Australia. Despite timid signs of opening, new Australian Prime Minister Anthony Albanese has announced that he has no intention of making concessions to Beijing.
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