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China has turned the cash tap off for Australia and slashed its big money buy-up of Aussie businesses and land – but vast tracts of the country are still Chinese-owned.

The communist superpower last year spent 28 times LESS in Australia than at its peak, investing just $815million in 2021, compared to the $22.5billion-plus it splurged in 2008.

Since the global financial crisis, China has pumped a staggering $153billion into Australia, splashing more cash here than anywhere else in the world except the USA.

The Chinese have snapped up a key port, mines, agricultural land, dairy processors, valuable real estate, state-sponsored schools, plus water and energy companies. 

Almost every aspect of Australian life now has Chinese influence – even down to paying with Afterpay, which is part-owned by China’s Tencent.

But deteriorating relations between China and Australia – which this week saw Defence Minister Peter Dutton warning of a possible war – has cut off the cash flow.

A map highlighting some of China's purchases and deals on Australian soil

A map highlighting some of China's purchases and deals on Australian soil

A map highlighting some of China’s purchases and deals on Australian soil

Latest figures in a new study reveal Chinese investment in Australia in 2021 was down by almost 70 per cent on 2020, which was already the lowest since 2007.

Tougher scrutiny for overseas takeovers and tighter screening have been key factors for China’s sliding interest in Australia, said international accountants KPMG in the new report. 

Just two major Chinese acquisitions made it past Australian business regulators in the past year, after earlier Beijing bids for Lion Drinks and Alita Resources – worth a combined $670million – were blocked.

Both of the latest buys were in the mining sector, with lithium miners AVZ Minerals bought by Suzhou CATH Energy-Technologies for $318million, and Balmoral Iron Pty Ltd bought by CITIC for $187million. 

Overall, just 11 Chinese transactions got the green light in the last year, compared to 20 the year before.

‘There are a number of administrative obstacles in more stringent regulations for Chinese companies investing in Australia now,’ report co-author Dr Hans Hendrischke told Daily Mail Australia.

‘And the political issues mean people would consider the long term commitment very carefully now before they decide to invest.’

Despite Covid, China still increased its overall overseas spending in 2021, with Beijing investments in Europe growing by a quarter, and a shift in strategy to see more cash for smaller, more local projects than the bigger acquisitions of the past.

But China’s 15-year spending spree here means the superpower still owns huge chunks of Australia, despite the escalating tensions between the two nations.

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 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 Northern Territory government decided to lease the Port of Darwin (pictured) – now known as Darwin Port – to Chinese-owned company Landbridge for 99 years

China's President Xi Jinping is pictured in December 2019 during a trip to Micronesia

China's President Xi Jinping is pictured in December 2019 during a trip to Micronesia

China’s President Xi Jinping is pictured in December 2019 during a trip to Micronesia

The tense stand-off has called into question the 2015 decision to grant a 99-year lease on the Port of Darwin to Chinese-owned Landbridge, which has links to the People’s Liberation Army of China.

The controversial $500million deal is said to be legally locked in and cannot be undone, which raised the ire of then-US President Barack Obama.

But Prime Minister Scott Morrison insisted last month the government could not have blocked the sale of the lease.

‘There was no authority for the federal government to reject, approve anything in relation to the leasing of that asset,’ he told Parliament.

The deal at the time was outside the remit of the Foreign Investment Review Board, which has since had its powers increased to become more of a watchdog body. 

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’. 

He said the deal was less about business and more about Chinese strategic interests – and the superpower’s 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 controversial $500million Darwin Port deal was called into question at the time by then US President Barack Obama (pictured, Port of Darwin)

The controversial $500million Darwin Port deal was called into question at the time by then US President Barack Obama (pictured, Port of Darwin)

The controversial $500million Darwin Port deal was called into question at the time by then US President Barack Obama (pictured, Port of Darwin) 

Smaller Third World 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.

Chinese companies are also the largest holders of Australian water, setting inflated prices that local farmers struggle to afford.

A report on foreign ownership on water entitlement found Chinese investors surged ahead of the US to own 1.9 per cent of our nation’s water in 2020.

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

Chinese marines attend a military drill on the way to Port Darwin to attend Exercise Kakadu 2018 on August 30, 2018

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 2020, a 5,071-hectare farm property located near Ballan, about 60km west of Melbourne, was snapped up 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

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

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

Mawallok Estate (pictured) in Stockyard Hill, in western Victoria, changed hands for an undisclosed price after being marketed with a huge $25million asking figure

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

The largest water market in Australia is the Murray-Darling Basin (pictured) in the south-east

The largest water market in Australia is the Murray-Darling Basin (pictured) in the south-east

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Coalmines in the Hunter region (pictured) have been snapped up by a state-owned Chinese firm, Yancoal

Coalmines in the Hunter region (pictured) have been snapped up by a state-owned Chinese firm, Yancoal

Coalmines in the Hunter region (pictured) have been snapped up by a state-owned Chinese firm, Yancoal

Increasingly China’s focus has been on snapping up Australian mining companies to feed its demand for mineral resources, especially lithium for technology products, and guarantee supply lines. 

In 2020, Chinese companies made four major acquisitions, snapping up gold, copper, iron ore and coal mines in Western Australia and NSW for a combined total of close to $1billion.

Those takeovers followed Chinese mining group Yancoal purchasing BHP coal assets in NSW in 2017, including the Hunter Valley’s Mt Thorley Warkworth site.

Prior to the strengthening of the FIRB’s oversight powers, the $1.5billion sale of Tasmanian dairy processor Bellamy’s to Mengniu Dairy Company was approved in 2019.

But a similar bid for Lion Drink and Dairy was rejected by the more powerful FIRB the following year.

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)

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)

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)

In reaction to the rejection, Chinese property developer Poly Global pulled the pin on a $300million bid to buy Bingara Gorge residential development in southwestern Sydney from Lendlease, after a reported ‘last-minute directive from Beijing’. 

But in 2020, China-based Peakstone bought the 45 Clarence Street tower block in Sydney’s CBD for $530million after they managed to get the deal greenlit by the FIRB.

Under changes to ownership laws in Australia, all foreign investments must now be approved by the review board, regardless of their value. 

The government has also introduced stricter regulations for foreign firms investing in sensitive industries including telecommunications, the energy sector and military supply lines. 

‘China is now focusing on Australian commercial real estate and mining,’ added Dr Hendrishke.

‘But there is little sign of them disinvesting – they have sold Cubbie Station Cotton, but most other investments have remained in Chinese hands.

‘These are seen as long-term investments – and they’re holding on to them.’

The $1.5billion sale of Tasmanian dairy processor Bellamy's to Mengniu Dairy Company was approved by the Foreign Investment Review Board in 2019

The $1.5billion sale of Tasmanian dairy processor Bellamy's to Mengniu Dairy Company was approved by the Foreign Investment Review Board in 2019

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. 

November 30: Chinese foreign ministry spokesman Lijian Zhao posted a doctored image showing a grinning Australian soldier holding a knife to the throat of an Afghan child. The move outraged Australians. 

December 12: Australian coal is added to a Chinese blacklist.

December 24: China suspends imports of Australian timber from NSW and WA after local customs officers say they found pests in the cargo.

January 11, 2021: Australia blocks $300million construction deal that would have seen state-owned China State Construction Engineering Corporation takeover Probuild. The bid was blacked over national security concerns. 

February 5, 2021: China confirms Melbourne journalist and single mother Cheng Lei has been formally arrested after being detained in August, 2020.

February 23, 2021: China accuses Australia of being in an ‘axis of white supremacy’ with the UK, USA, Canada and NZ in an editorial.

March 11, 2021: Australia is accused of genocide by a Communist Party newspaper editor. 

March 15, 2021: Trade Minister Dan Tehan announced he wants the World Trade Organisation to help mediate discussions between the two countries over the trade dispute. 

April 21, 2021: Foreign Minister Marise Payne announces Australia has scrapped Victoria’s controversial Belt and Road deal with China using new veto powers. 

May 6, 2021: China indefinitely suspends all strategic economic talks with Australia, blaming the Morrison Government’s attitude towards the relationship. The move cuts off all diplomatic contact with Beijing under the China-Australia Strategic Economic Dialogue, freezing discussions between key officials below a ministerial level.

June 22, 2021: China tries to ‘ambush’ Australia with a push to officially declare the Great Barrier Reef ‘in danger’ 

September 15, 2021: Australia, the UK and the US announce the AUKUS security pact which will give the Australian military nuclear-powered submarines to counter China growing aggression in the Indo Pacific. The move is met with seething anger in Beijing. 

March 24, 2022: Details of a Memorandum of Understanding emerge which could allow Beijing to station warships on the Solomon Islands, just 1,000 miles off the coast of Australia. Canberra warns it is ‘concerned by any actions that destabilise the security of our region’.

April 25, 2022: Defence Minister Peter Dutton warns on Anzac Day that Russia and China’s resurgence means Australia must be on a war-footing. ‘The only way you can preserve peace is to prepare for war, and to be strong as a country,’ he said. ‘We’re in a period very similar to the 1930s.’

April 27, 2022: Home Affairs Minister Karen Andrew says China is likely to send troops to the Solomon Islands, and was using the row to derail Australia’s Federal Election. She said Beijing was ‘clearly very aware we are in a federal election campaign at the moment.’

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Source: DailyMail

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