Chinese investors wanting to buy Australian farms or agribusinesses must obtain “broad community approval” if they want to operate in Australia, according to a new report to be released in Beijing on Thursday.
The report, produced by Powell Tate Australia and Weber Shandwick China, finds “there is not a strong xenophobic sentiment against Chinese investment in Australian agriculture” but that there was a “significant misunderstanding” about such investment.
“Misperceptions” included views that: Chinese investors are state owned enterprises doing the bidding of the government; they care more about profits than people; they disregard the environment; and they ignore local communities and sensitivities.
The report says Australian agriculture needs Chinese investment, and the various concerns about such investment can be addressed.
“To do that, Chinese companies need to embark upon stakeholder engagement strategies to communicate their intentions in the market and establish the benefits their investments will bring to the local community around an asset and to the wider nation,” it says.
The Licence That Matters Report: Beyond Foreign Investment Board Approval report is based on interviews in China and Australia with key players in agriculture, investment and government sectors.
Chinese investors must realise there is no single federal or state government authority that awards a “social licence”, or community acceptance of a proposed foreign investment, it says.
“Success depends on understanding what needs to be done to win the hearts and minds of local community groups and other stakeholders in each situation, and on understanding the ever-changing atmospherics,” it says.
It also says that attaining Foreign Investment Review Board approval for the acquisition of an asset was “not sufficient to operate in Australia”.
It describes “the secret” to the success of some Chinese investments in Australia as a “joint venture partnership approach”, citing the success of New Hope Group, which “partnered” with local owners and retained “local management and a connection to the community”.
The report found negative perceptions about Chinese investment in Australian agriculture in some quarters had been worsened by the failure of many projects to obtain community approval, because the Chinese investors lacked strategies to engage with local communities and other key stakeholders.
The report acknowledged that the past year had been a tumultuous period for Chinese investment in Australia, with Chinese bids for the sprawling Kidman cattle estate and for a New South Wales power distribution network company rejected by the federal government on grounds of national security.
When asked if Australian agriculture needed Chinese investment, National Farmers Federation president Fiona Simson said: “Yes, absolutely. Australian agriculture has enormous potential in front of it at the moment. We’ve seen unprecedented growth over the last 12 months.
“We need investment, not just Chinese, we need investment from onshore, offshore, everywhere. And obviously Chinese investment, or other investment from offshore is going to make up an enormous part of that. We just haven’t got the capital onshore to be able to capitalise on the potential that’s in front of us.”