Australia missing out on millions of dollars in investment potential from Chinese investors: former Trade Minister Andrew Robb

The nation is missing out on significant inflows from Chinese investors because they fear rejection for political reasons, former trade minister Andrew Robb says.

Australia is missing out on significant inflows from Chinese investors because they fear the Foreign Investment Review Board will reject it for political reasons, former trade minister Andrew Robb says.

The ex-Abbott and Turnbull government minister – who was instrumental in negotiating Australia’s free trade agreement with China – said Chinese companies now considering local investment were being advised not to bother approaching the FIRB.

They were taking their investment dollars elsewhere, including to Africa and the Middle East, he told a conference in Canberra.

In particular, Mr Robb singled out the former Morrison government for politicising the relationship. “The relationship has been used and abused for party political purposes over the last three years, in particular,” he said in an interview after the conference.

Ahead of the event, the Australia-China Business Council released a report investigating new areas of potential co-operation in less politically-sensitive sectors, recommending the development of ties in green energy.

With $20bn in exports restricted by Chinese sanctions, the King & Wood Mallesons-authored paper said: “There is a growing recognition that China’s role in climate change mitigation globally is critical to achieving net zero goals.” “By leveraging strong economic and trade complementarities, Australian and Chinese businesses are well positioned to unlock new opportunities and deliver a greener future,” it reads.

“Nurturing relationships, better understanding the respective economies and culture and cultivating business initiatives carry benefits for both.”

ACBC chairman David Olsson said the so-called green channel was a multi-year, multisector platform which highlighted the opportunities arising from collaboration with China addressing the climate challenge.

“The report highlights the scale of the net zero challenge, reminds us of the fundamental importance of bilateral and multilateral trade and investment relationships, and explores those areas where there are practical and realistic opportunities for business collaboration,” he said.

China is the world’s largest energy consumer and carbon emitter, accounting for a third of global emissions.

While the Albanese government has just legislated its commitment to net zero emissions by 2050, China has committed to achieving this before 2060 with a goal of having its carbon emissions peaking by 2030.

The report argues that Australia and China should co-operate in areas of renewable energy combining Australian know how in areas with Chinese demand. It notes that China invested a record $US266bn ($396bn) in low carbon technology in 2021, a third of total global investment.

Mr Robb, now a consultant specialising in trade within the Asia-Pacific, said the fact trade between Australia and China was still strong despite political tensions was evidence of underlying business ties between the two countries.

But, he said, some officials in the security community cast too broad a net when it came to defining strategic assets in a way he said was “just ridiculous”.

“I am not saying FIRB does that at all,” he told the conference on Wednesday. “But the experience, over the past few years, when there have been inquiries to FIRB, (would be investors) were quietly told they were wasting their time … now it has got to the point where FIRB doesn’t even hear about it.”

Mr Robb said he had, on occasion, been accused of being “a stooge for China” after talking positively about working with Chinese companies.

“It is not true,” he said. adding he was frustrated at the long term opportunities which Australia would miss out on by effectively cutting off new Chinese investment into the country.

He said he hoped there might be a change in the view on Chinese investment in Australia under the Labor government, but it was too early to tell.

“Let’s see,” he said.

Figures compiled by KPMG show a sharp fall in Chinese investment in Australia from a peak of around $15.4bn in 2016 – when Australia was the second-largest destination for investment after the US – to $2.5bn in 2020 and $800m in 2021.