Australia has become one of the wealthiest nations in the world. According to data from the International Monetary Fund (IMF), the country’s gross domestic product (GDP) per capita grew from $20,000 at the start of the 21st century to over $65,430 by 2023. This impressive economic growth has been praised by economists, global institutions, and world leaders who see Australia as a model for other economies. However, this growth is heavily supported by substantial foreign investments. Over the past two decades, billions to hundreds of billions of dollars have flowed into Australia, building infrastructure, hospitals, agricultural industries, mining, manufacturing, and more. These investments, however, come primarily from foreign countries—not from Australia’s own people or companies. Major sources include the United States, the United Kingdom, and, importantly, China.
China has played a crucial role in Australia’s economic success. Chinese investments have been a key driver of Australia’s growth. A report by KPMG and the University of Sydney reveals that between 2006 and 2023, Chinese investments in Australia totaled over $113 billion USD—a staggering sum. What’s particularly notable is that more than half of this investment was directed at just one sector: mining and energy. Specifically, $70.8 billion went into this industry, followed by $27 billion in commercial real estate, $11.2 billion in infrastructure, $9 billion in healthcare, and $6.6 billion in renewable energy.
These investments have helped make Australia a major player in the mining and energy sectors, with exports worth billions going to China and other countries around the world. In 2023, data from the Department of Foreign Affairs and Trade showed that Australia exported over $136 billion AUD worth of iron ore and concentrates, $102 billion worth of coal, $74 billion worth of natural gas, and $28 billion worth of gold. Just like investments, trade plays a vital role in any economy, enabling the exchange of goods, services, and capital between countries and fostering economic growth and development. This is why China, both a significant investor and a major buyer of Australian goods, remains a vital part of Australia’s economic story.
Yet, in recent years, public perception of China in Australia has soured. A report by the Lowy Institute’s flagship annual poll shows that trust in China is at an all-time low, with only 17% of Australians expressing confidence in China’s ability to act responsibly on the global stage. Additionally, 53% of Australians now see China more as a security threat than an economic partner. A strong majority, 71%, believe it is likely that China will pose a military threat to Australia within the next 20 years.
Despite these concerns and the growing distrust, China continues to be a significant part of the Australian economy. One clear example of this influence is seen in their investments and ownership of major Australian corporations. China’s impact on the Australian economy is more significant than any other country, largely due to these investments.
One of the most notable instances of Chinese investment in Australia occurred in 2009. In the early months of that year, Rio Tinto, a British-Australian multinational known as one of the world’s largest metals and mining corporations, struck a $19.5 billion deal with the Aluminum Corporation of China (Chinalco). This investment provided Rio Tinto with much-needed cash and allowed Chinalco to double its stake in one of the world’s largest resource groups. This agreement marked the largest-ever foreign corporate investment by a Chinese company.
The deal raised concerns, particularly within the Australian government. There were worries that Australian regulators might not view the Rio Tinto-Chinalco deal favorably, especially after Treasurer Wayne Swan announced plans to tighten foreign investment rules. However, Rio Tinto’s management, particularly Chairman Paul Skinner, saw the deal as essential. Closer ties to Chinalco were expected to help Rio Tinto access funding from Chinese banks to support project development. The investment also played a crucial role in helping Rio Tinto manage its significant debt, which had reached $38.7 billion, with some payments due in 2009 and 2010.
Today, Rio Tinto is a major conglomerate valued at over $103 billion, making it the third most valuable public company, just behind BHP and China Shenhua Energy. As one of the world’s largest mining companies and one of Australia’s most important corporations, Rio Tinto holds significant sway in the country’s economy. But who has control over the company? The answer lies with its shareholders. Chinalco, a Chinese corporation, is the largest shareholder with an 11.3% stake, followed by BlackRock with 7.83%, Vanguard Group with 5.18%, and the rest spread out among many investors.
This is just one example of the many major Chinese investments in Australia. Another area of concern in Australia today is the real estate market. Many Australians struggle to find affordable homes, and even when they do, they often face overpriced rentals. There are concerns that foreign ownership of Australian properties is driving up prices. Whether or not this is entirely true, what is clear is that Chinese investors are among the largest landowners in Australia.
Data from news.com.au shows that China owns over 9.2 million hectares of farmland in Australia, making them the second-largest landowner, just behind the United Kingdom, which owns 10.2 million hectares. Additionally, one of the largest foreign investments in Australia’s commercial real estate market occurred in 2015 when the Chinese sovereign wealth fund China Investment Corporation acquired nine office towers in Australia for over $2.45 billion. The Australian Financial Review (AFR) called it the “deal of the year,” and it was the largest direct real estate transaction in Australia’s history at the time. The portfolio had a fully leased income of approximately $145 million and included stakes in premium buildings such as 120 Collins Street in Melbourne and 126 Phillip Street in Sydney.
Finally, perhaps the most significant and controversial Chinese investments have been in Australia’s infrastructure. In 2016, an Australian-led consortium with Chinese investment secured a 50-year lease on Australia’s largest container and cargo port for $9.7 billion. The Port of Melbourne, which handled more than 3,000 ships annually in 2016, was acquired by a consortium that included Australia’s second-largest wholesale funds manager, Queensland Investment Corporation (QIC), and multinational firm Global Infrastructure Partners (GIP). An Australian newspaper reported that GIP was partially representing China’s sovereign wealth fund CIC Capital, which effectively secured a 20% stake in the port.
In 2014, another deal was signed with Chinese corporations for the Port of Newcastle, the world’s largest coal port, in a transaction worth $1.75 billion. The acquirers were a consortium comprising Hastings Funds Management and China Merchants, which won the bid for this New South Wales Government asset.
A year later, in 2015, the Landbridge Group of China signed a 99-year lease for the Darwin port, worth $506 million. This major investment was surrounded by controversy, as the company reportedly had close ties to the Chinese Communist Party, raising national security concerns. A defense analyst from the Australian Strategic Policy Institute noted that the primary concern was not covert surveillance but the potential for Chinese government influence to curtail investment in this critical asset.
So, how important is China to Australia? The answer is that they are indeed one of the country’s most vital economic partners. Even though Australian views of China have soured in recent years, it is impossible to ignore the economic impact they have had on Australia. As China’s economy continues to grow, it is likely that they will maintain their role as Australia’s largest trading partner.