Chinese investors in Australian agriculture and agribusiness need to obtain a “social licence” to operate in the market if their investments are to succeed, according to a report by Powell Tate, a public affairs specialist agency and part of global communications and engagement firm, Weber Shandwick.
Alistair Nicholas, executive vice president and director of special projects, Powell Tate Australia, and principal author of the report, commented, “Investors need to demonstrate a commitment to Australian society that goes beyond earning profits in order to succeed, even where an investment is providing an economic benefit to the nation”.
Nicholas, who is based in Sydney, Australia, led the qualitative study over the past 12 months. The study involved detailed interviews with parties close to foreign investment and within the agriculture sector including current and former politicians, political advisors, government bureaucrats, academics, industry association members, the business advisory community, and investors from China.
Based in Beijing, Yang Xing, associate director, Weber Shandwick China, also led interviews with Chinese stakeholders.
“After listening to key stakeholders, we found that Chinese investors are best advised to adopt a ‘joint venture’ model rather than make straight-out investments in Australian agriculture if they are to succeed,” remarked Nicholas. “It seems Chinese investors going abroad now have to consider the same model that was required of foreign companies when they first entered China after it opened to the outside world.”
The report includes examples of Chinese investment case studies that have failed or succeeded in the Australian agribusiness sector. The report recommends a “best practice road map” for would-be Chinese investors in Australian agriculture. “But it’s not just about investments in Australian agriculture,” according to Nicholas. “The findings of this report are applicable beyond agriculture and lessons can be learned across markets and sectors. Wherever Chinese businesses are looking to invest overseas, whatever the sector, they will need to obtain local community support to operate. This report provides guidelines to achieve that.”
The report officially was officially launched today at the PublicAffairsAsia Government Affairs Forum in Beijing, China.