Chinese investment in Australian infrastructure assets: accounting for local public preferences

Abstract

Chinese investment in Australian infrastructure assets can bring economic benefits for both countries. However, it can also create domestic political challenges. This is because Australian public support for foreign investment in infrastructure is limited. In order to better inform public policy in China and Australia, this paper undertakes a choice modelling analysis of original survey data to determine the drivers of local public preferences. The Australian public is found to be more concerned by the share of foreign ownership an investment will bring rather than the fact it is from China. Accounting for these preferences, such as through the recruitment of local partner companies, will facilitate Chinese investment in Australian infrastructure, and potentially, greater bilateral engagement on the Belt and Road Initiative. The Australian case might also offer wider lessons for Chinese investment in infrastructure assets abroad.

Peddling or Persuading: China's Economic Statecraft in Australia

“…While the Australian public has been more skeptical of foreign investors in general, not just against China but also against Japan and the United States, 100 and some have argued that the share of foreign ownership matters more than the investor country (Laurenceson et al 2018), the public opinion data discussed above point to growing concerns over the role of Chinese capital, not just within Australia but also in the Asia-Pacific region more broadly. Suspicion of infrastructure projects elsewhere underline the longer-term spillover reputational costs of non-transparent approaches to economic statecraft, including the association of Chinese capital with Beijing's foreign interference and influence activities.…”