With Chinese buyers eyeing farm land in Australia and New Zealand, authorities are coming under growing pressure to balance the need for foreign investment against accusations of "selling out". Treasurer Scott Morrison blocked its sale to all foreign investors in November, including from China, saying it was contrary to the national interest given part of the holding overlaps with a military testing range. But Morrison recently approved the sale of Australia's largest dairy farming business to a Chinese buyer, despite criticism that businessman Lu Xianfeng's Aus$280 million (US$210 million) purchase of Tasmania's Van Diemen's Land Company could impact food security.
Hans Hendrischke from the University of Sydney Business School co-authored a KPMG report which found that agribusiness accounted for only 1.0 percent of Chinese direct investment in Australia in 2014, said while the Middle Kingdom was not yet a major foreign investor in Australian farmland, politicians were wary of a public backlash as its stake grows. It is a similar story in New Zealand, where a KPMG report last year found the United States was the biggest buyer of that country's dairy land, purchasing almost five times as much as China, although Chinese purchases tend to attract more attention.
Such is the concern about valuable assets passing into foreign hands, Australia last year tightened scrutiny on overseas investment in agricultural land -- lowering the level at which investments are screened to a cumulative total of Aus$15 million (US$11.3 million). Previously only purchases over Aus$252 million were screened. The government is also creating a foreign ownership register of farming land, after politicians with rural constituencies warned against selling farms to overseas investors, including to top trade partner China.
In New Zealand, the world's largest dairy exporter, critics say the government has shown an inconsistent approach to Chinese ownership of farmland, bowing to populist pressure from political opponents. China is the biggest foreign investor in the South Pacific country's dairy industry, which includes milk processing, according to the New Zealand-China Council.
