Green Chinese backing key for Australia
There are unparalleled opportunities for Australia-China collaboration in zero-emissions industries with the right policy settings, according to a report released recently.
The report, "Green capital tsunami: China's >$100 billion outbound clean-tech investment since 2023 turbocharges global energy transition", released on Oct 2 by the independent think tank Climate Energy Finance, or CEF, said Chinese firms have committed more than$100 billion in outbound foreign direct investment since 2023.
Much of the investment has been directed toward decarbonization sectors such as solar, wind, batteries, grid, new energy vehicles, hydro and green hydrogen, encompassing Europe, the Asia-Pacific, Africa and South America.
When Australian Treasurer Jim Chalmers visited Beijing, one of the topics on his agenda was decarbonization and how Australia could benefit from cooperation with China.
The report said the "green capital tsunami" has profoundly expanded and reshaped the "global energy transition and geopolitics, delivering a global decarbonization net positive".
"Importantly, it also embraces the growing domestic markets in the less developed Global South, as the world races to tackle climate change and nations prioritize and align their energy security, national security and economic prosperity objectives," the report said.
In Australia's case, the "current posture" disincentivizes Chinese private investors.
Chinese investment in Australia is relatively weak compared to the rest of the world and was at a multi-decade low at only $613 million in 2023, according to the report.
One of its recommendations calls on the Australian government "as a strategic national-interest priority" to clarify the rules of engagement with the Foreign Investment Review Board, so Chinese firms looking to co-invest are incentivized by "transparent, stable, welcoming investment policy frameworks and guidelines".
Xuyang Dong, CEF's China energy policy analyst and co-author of the report, said China leads the world in clean energy.
"It is actively injecting more and more zero-emissions energy into its national power system even as it progressively shifts to electrifying everything and upgrading its energy policy to accelerate the energy transition progress," she told China Daily.
"China is increasingly the world leader in almost all these zero-emissions industries of the future, and that opens up opportunities to invest globally into clean energy," she said.
Dong said the problem for Australia is a "lack of effective communication and trust" between the two countries.
David Olsson, chair and president of the Australia China Business Council, said the challenge for Australia lies in balancing its security concerns "with the clear economic benefits that foreign investment brings".
Asked how Australia's perceptions can be changed, he said the "Future Made in Australia" legislation would be a good starting point, "ensuring foreign capital contributes to national goals".