Chinese overseas direct investment
The Crawford School's East Asian Bureau of Economic Research (EABER), hosted three events in Sydney last week as part of its major research project on China's emerging overseas direct investment.
The first roundtable involved leading global academics, business leaders and senior government officials to discuss the role and effectiveness of Australia's foreign investment regime, including the Foreign Investment Review Board (FIRB), in keeping Australia open for business to foreign investors. Highlights included Crawford’s Shiro Armstrong arguing that FIRB’s investment review thresholds are becoming irrelevant and discriminatory with the increased threshold provisions made through Australia's FTAs with US and New Zealand, and soon Japan and South Korea. Crawford School PhD student Rebecca Mendelsohn co-authored a paper for the Roundtable with former ACCC Commissioner Allan Fels, where they outlined the role of and potential reforms required to the FIRB review process. Shiro’s and Rebecca’s research were featured in the Australian Financial Review (page 5, 29 August 2014).
The second roundtable was co-hosted by EABER with the Business Council of Australia (BCA) and the Australian Financial Review. The Roundtable brought together 70 business, policy and academic leaders to discuss the risks and opportunities inherent with rising levels of state owned enterprises (SOE) and sovereign wealth funds (SWF) investing in overseas destinations. The BCA used the Roundtable to launch its Discussion Paper on Foreign Investment and State-owned Enterprises.
The roundtable was a significant step forward in understanding SOE and SWF investment and included Australian Treasurer, Joe Hockey, delivering the keynote address, along with Senator Penny Wong highlighting the important role of research in informing the public debate on SOE and SWF investment into the future. Crawford students Paul Hubbard (PhD) and Patrick Williams (MIDEC) contributed a paper exploring the heterogeneity of China’s SOEs.
Finally, a public forum on China’s SOEs and global investment included Peter Drysdale, Andrew Michelmore (MMG CEO), Fan Gang (NERI), and John Denton (Corrs Chambers Westgarth CEO). The panel reiterated the need to understand the heterogeneity of China’s SOEs and the market forces driving their push into the global market, and the need to engage in public discourse to ensure the public response to rising foreign investment is well informed.