The escalating tensions with China has exposed just how tight the Asian superpower’s grip is on the Australian economy, both in terms of trade and its ownership of important local assets.
As Beijing becomes increasingly belligerent toward Australia, the latter’s heavy reliance upon Chinese money has been exposed as vulnerability instead of a strength.
China now owns key ports, mines, agricultural land, dairy processors, valuable real estate, state-sponsored schools, plus water and energy companies.
A map highlighting some of China’s purchases and deals on Australian soil
China’s President Xi Jinping is pictured in December 2019 during a trip to Micronesia
The rosy days of 2015 – when the Northern Territory government decided to lease the Port of Darwin to Chinese-owned company Landbridge for 99 years – now seem long gone, but such deals cannot be undone.
The controversial $500million deal was called into question at the time by then US President Barack Obama.
Northern Territory Labor MP Luke Gosling said the lease is a concern because all Chinese companies – even those privately owned – are ‘still accountable to Beijing’, especially one that owns critical infrastructure abroad.
He wrote in an article for the Australian Strategic Policy Institute that the deal was less about business and more about Chinese strategic interests – and the notorious Belt and Road Initiative.
The global development plan is a key policy of President Xi Jinping and China aims to build and own infrastructure in as many countries throughout the world as possible to increase those nations’ dependence on China.
The Northern Territory government decided to lease the Port of Darwin (pictured) – now known as Darwin Port – to Chinese-owned company Landbridge for 99 years
The controversial $500 million deal was called into question at the time by then US President Barack Obama (pictured, Port of Darwin)
Smaller countries are often tempted to sell their land, and their sovereignty, in return for big money deals offered by Beijing.
‘You won’t hear the government say this openly for obvious reasons – it oversaw the sale – but the 2015 lease of Darwin Port was part of the Belt and Road Initiative,’ Mr Gosling said.
‘Officially, the Darwin Port sale wasn’t badged as a BRI project. But it was undoubtedly part of it from Beijing’s point of view, even if not from ours.’
Another shocking revelation about the extent of Chinese control of key assets came in June when it was revealed that Sino companies are the largest holders of Australian water, setting inflated prices that local farmers struggle to afford.
A new report on foreign ownership on water entitlement found Chinese investors have surged ahead of the US to own 1.9 per cent of our nation’s water.
Around 10.5 per cent or almost six Sydney Harbours of the nation’s water is now foreign owned, according to the report.
Chinese marines attend a military drill on the way to Port Darwin to attend Exercise Kakadu 2018 on August 30, 2018
China now owns 756 gigalitres of water after a three per cent boost of its share in 2018-19, putting it ahead of companies owned in the US (713GL) and the UK (394GL).
Increasing control of water assets came at a time that China was also boosting its ownership of agricultural land.
Mawallok Estate in Stockyard Hill, in western Victoria, changed hands for an undisclosed price after being marketed with a huge $25million asking figure.
Title documents also show the largest exporter of Australian wool, Chinese business tycoon Qingnan Wen, bought the heritage-listed sheep station.
Two months later in August, a 5071-hectare farm property located near Ballan, about 60km west of Melbourne, was snapped up for for $60million by China’s Guangxi Investment Co by their subsidiary Harvest Agriculture.
The energy sector is another area where Chinese investors have looked to buy big.
Despite its deceptive name, Energy Australia is owned by China’s Light and Power Co, while Alinta Energy is a subsidiary of Chow Tai Fook Enterprises.
In 1993, China’s biggest airline, state-owned China Southern Airlines, paid the Western Australian government $1 to lease Merredin Aerodrome (pictured) for 100 years
Mawallok Estate (pictured) in Stockyard Hill, in western Victoria, changed hands for an undisclosed price after being marketed with a huge $25million asking figure
How does the water market work?
Government appointed bodies decide how much water from rivers can be given out each year. Once it is allocated, users can trade their water.
There are two main types of water trade: temporary and permanent. A temporary transfer is a transfer of water specifically for the irrigation season.
If one farmer does not have enough water for his crops, he can buy water from another. A permanent transfer is the transfer of the water entitlement.
The purchaser buys rights to a yearly allocation of water from a river and receives the allocation until they sell.
The Australian water market is not national but split into different sections within each state. The largest market is the Murray-Darling Basin in the south east.
The largest water market in Australia is the Murray-Darling Basin (pictured) in the south-east
Chinese mining group Yancoal in 2017 purchase BHP coal assets in New South Wales including the Hunter Valley’s Mt Thorley Warkworth site.
With fears Beijing-backed firms have been strategically buying up Australian assets, the federal government moved in March to strengthen foreign investment regulations.
This, along with the economic slowdown from the coronavirus crisis has seen new Chinese commercial investment in Australia fall significantly.
But even before the pandemic Chinese investment in Australia was beginning to wane.
Data from the Australian National University’s Chinese Investment in Australia (CHIIA) shows that from its $15.8billion peak in 2016, new investment by Sino firms in 2019 fell to just $2.5billion.
That year the $1.5billion sale of Tasmanian dairy processor Bellamy’s to Mengniu Dairy Company was approved by the Foreign Investment Review Board.
But in August this year, attitudes sharply changed and Treasurer Josh Frydenberg put a stop to a similar $600million deal that would have seen Lion Dairy in the hands of a Chinese firm.
Coalmines in the Hunter region (pictured) have been snapped up by a state-owned Chinese firm, Yancoal
Most of the land owned by foreigners in Australia is in Western Australia and the Northern Territory and is used for cattle farming (stock image)
Mr Frydenberg said the deal was blocked because it was ‘contrary to national interest’ – a statement which angered the Chinese Communist Party.
The following month Chinese property developer Poly Global pulled the pin on a $300million bid to buy the Bingara Gorge residential development in southwestern Sydney from Lendlease.
The Australian Financial Review reported the call was made after a last-minute ‘directive from Beijing’.
Under changes to ownership laws in Australia, all foreign investments must now be approved by the review board, regardless of their value.
The government have also introduced stricter regulations for foreign firms investing in sensitive industries including telecommunications, the energy sector and military supply lines.
Dozens of Chinese state-sponsored schools teaching Mandarin have opened up across the world in recent years, including several in Australia. Pictured: A Confucius classroom
The $1.5billion sale of Tasmanian dairy processor Bellamy’s to Mengniu Dairy Company was approved by the Foreign Investment Review Board in 2019
How China’s feud with Australia has escalated
2019: Australian intelligence services conclude that China was responsible for a cyber-attack on Australia’s parliament and three largest political parties in the run-up to a May election.
April 2020: Australian PM Scott Morrison begins canvassing his fellow world leaders for an inquiry into the origins of the coronavirus pandemic. Britain and France are initially reluctant but more than 100 countries eventually back an investigation.
April 15: Morrison is one of the few leaders to voice sympathy with Donald Trump’s criticisms of the World Health Organization, which the US president accuses of bias towards China.
April 21: China’s embassy accuses Australian foreign minister Peter Dutton of ‘ignorance and bigotry’ and ‘parroting what those Americans have asserted’ after he called for China to be more transparent about the outbreak.
April 23: Australia’s agriculture minister David Littleproud calls for G20 nations to campaign against the ‘wet markets’ which are common in China and linked to the earliest coronavirus cases.
April 26: Chinese ambassador Cheng Jingye hints at a boycott of Australian wine and beef and says tourists and students might avoid Australia ‘while it’s not so friendly to China’. Canberra dismisses the threat and warns Beijing against ‘economic coercion’.
May 11: China suspends beef imports from four of Australia’s largest meat processors. These account for more than a third of Australia’s $1.1billion beef exports to China.
May 18: The World Health Organization backs a partial investigation into the pandemic, but China says it is a ‘joke’ for Australia to claim credit. The same day, China imposes an 80 per cent tariff on Australian barley. Australia says it may challenge this at the WTO.
May 21: China announces new rules for iron ore imports which could allow Australian imports – usually worth $41billion per year – to be singled out for extra bureaucratic checks.
June 5: Beijing warns tourists against travelling to Australia, alleging racism and violence against the Chinese in connection with Covid-19.
June 9: China’s Ministry of Education warns students to think carefully about studying in Australia, similarly citing alleged racist incidents.
June 19: Australia says it is under cyber-attack from a foreign state which government sources say is believed to be China. The attack has been targeting industry, schools, hospitals and government officials, Morrison says.
July 9: Australia suspends extradition treaty with Hong Kong and offers to extend the visas of 10,000 Hong Kongers who are already in Australia over China’s national security law which effectively bans protest.
August 18: China launches 12-month anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry.
August 26: Prime Minster Scott Morrison announces he will legislate to stop states and territories signing deals with foreign powers that go against Australia’s foreign policy. Analysts said it is aimed at China.
October 13: Trade Minister Simon Birmingham says he’s investigating reports that Chinese customs officials have informally told state-owned steelmakers and power plants to stop Aussie coal, leaving it in ships off-shore.
November 2: Agriculture Minister David Littleproud reveals China is holding up Aussie lobster imports by checking them for minerals.
November 3: Barley, sugar, red wine, logs, coal, lobster and copper imports from Australia unofficially banned under a directive from the government, according to reports.
November 18: China releases bizarre dossier of 14 grievances with Australia.
November 27: Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports where they have been denied entry.
November 28: Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ or sold at below-cost. The claim is denied by both Australia and Chinese importers.