It is this sort of decision that has contributed to a 47% decline in Chinese investment in Australia in the year before Covid-19. When investment retreats, so will trade.
When it comes to China, Australia seems determined to make a bad situation worse. That is a serious concern for investors who have used Australian stocks as a way to tap into China’s growth and markets.
China is not happy with the Australian relationship because of the increasingly vigorous vilification of China in Australian media and politics. This also includes several recent policy decisions which are clearly aimed at China. The recent rejection by the Australian Treasurer Josh Frydenberg of a A$600 million ($596.5 million) investment by Mengniu Dairy is seen as an arbitrary decision because the investment had been approved by all the relevant Australian regulatory authorities.
