22 Mar 2013

Digging Deep: Why do we need to understand Chinese investment in the energy & resources sector?

Jonathan Li from our Energy & Resources group explains the background to our report "Digging Deep: Chinese investment in Australian energy and resources".

Digging Deep: Why do we need to understand Chinese investment in the energy & resources sector?
Jonathan Li, Partner, Clayton Utz

Digging Deep is a comprehensive survey of Chinese investments in Australian energy and resources over the eight-year period to the end of 2012. It really arose as a result of issues and questions and queries raised to me by three interest groups.

One is the Chinese companies themselves who are either existing or potential investors in Australia. How do they make investments? What investments have been made in the past? How successful were they and whether the Australian Foreign Investment Review regime is a barrier or a hurdle?

Now the second interest group is the Australian companies themselves who are trying to attract Chinese investments – again, how do they go about it, what are the preferences of the Chinese investors? It's about informing the debate that occurs from time to time about resources and nationalism and a theory that there is a need to inform this debate with what actually has happened – what assets have been sold and the value of these investments?

While we looked at and identified 196 announced investments over the eight-year period and we looked at a whole range of things, the nature of the investors, the value and number of these investors, the sectors in which they invested in and how that changes depending on the time period, the way that these investments were made, whether they were going into the project assets level or buying companies or shares in companies themselves and also how they managed these investments – do the Chinese investors import Chinese nationals into Australia to manage each assets or do they rely on Australian management? Finally there's the application of the foreign investment regime to Chinese investors in this sector and whether it has actually stopped these investments from occurring.

Related Knowledge

Get in Touch

Get in touch information is loading

Disclaimer

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.