What Chinese investors need in Australia

PREMIUM CONTENT. To continue reading please login, or click on SUBSCRIBE above, or purchase access to this report for 1 month.


October 13, 2017

SUCCESSFUL Chinese investors in Australia retain Australian management – and strive for meaningful engagement with their local community, says a new report on the angst that can be caused by wrong decisions  . . .

SOCIAL LICENCE, or the lack of, is the reason that Chinese investments in Australia, especially in agriculture, a sector keenly sought-after by Chinese investors, fail.
 Quite apart from needing official approvals, says a report jointly produced jointly by Powell Tate’s Sydney office and Weber Shandwick’s Beijing office, Chinese investors must have social licence — meaning engagement with the Australian community — from the grassroots level upwards, together with respect for the rules and regulations in Australia, including local industrial laws.
 To have a social licence is therefore to have acceptance of the local community, including local businesses, says the report, The Licence That Matters: Beyond Foreign Investment Review Board Approval.
 The report points to successful Chinese investments in Australia, all of which retain Australian management, engage Australian employees and contract local suppliers.
 The biggest mistake made by the Chinese investor is a belief that FIRB approval translates to having a licence to do as they wish with their investment.
 The report cites the celebrated failure of Ningbo Dairy in Gippsland, Victoria, a tale of naivety, ignorance, or, at worse, arrogance on the part of the Chinese investor.
 Ningbo Dairy acquired five farms in Gippsland, and planned major expansion —without first doing its homework.