Australia’s Westpac bank sees a full plate in China’s food dealsPosted: April 17, 2016
Australia’s Westpac sees opportunities in China’s growing appetite for Australian beef and seafood.
The 199-year-old Australian lender is trying to take advantage of China’s growing investment in Australia for high-quality food, property and supply chain, two executives of the bank said in an interview during the 2016 Australia Week in China.
China’s biggest personal computer maker Lenovo has recently bought a Perth-based seafood processing firm. China’s richest man, Wang Jianlin, last year acquired Australia’s largest cinema chain while a Shanghai-based dairy firm has been expanding food distribution operation in Australia after its takeover of Manassen Foods five years ago.
Westpac has been playing an active part in the deals, part of a rising tide of investment flows from China to Australia.
“We are seeing… a lot of growth and a lot opportunities for Chinese companies in our home markets of Australia and New Zealand,” said Andrew Whitford, regional head of Greater China at Westpac. “We want to be the dominant player up and down the China corridor” to facilitate such flows, he said.
China’s investment in Austria last year rose 60 per cent in Australian dollar terms, show data in a report by KPMG and the University of Sydney. Australia was the second-most favourite destination for Chinese investors in the last decade, next to the US, according to the report.
While real estate dominated Chinese investment in Australia last year, at 45 per cent, Chinese money is also diversifying from mining to other businesses, notably in agriculture. There were 12 agriculture deals last year worth AUD$375 million in dairy, beef and cotton, the report said.
Bala Swaminathan, president of international businesses at Westpac, said he saw a trend shift “from mining to dining” in Chinese investments into Australia.
China’s earlier investments aimed at securing mineral supplies from Australia have suffered huge losses and China’s purchase of houses and infrastructure is raising eyebrows in the country. Questions are also being raised on whether Australia should increase its exposure to China at a time when its economy is slowing down.
China’s imports from Australia fell 30 per cent in US dollar terms in the first quarter of this year from the same period last year even though a Sino-Australia free-trade pact came into effect in December.
Australian Prime Minister Malcolm Turnbull led about 1,000 business delegates to China last week, in a sign of the country’s commitment to growing trade and economic ties with the world’s second biggest economy.
For Westpac, which established a Shanghai branch in 2008 and now has a headcount of about 90 in Shanghai and Beijing, it’s a trend to be cashed upon.
While the bank’s traditional job is to help Australian businesses “navigate” in Asia, the trend has reversed in the last three or four years, said Swaminathan. “It’s not so much Australia out as China in…a bulk of our clients are now Asian companies as opposed to Australian companies, so there’s a big shift in our businesses.”
Source: SCMP “Australia’s Westpac bank sees a full plate in China’s food deals”