Issue 149 - The Australian Chamber of Commerce in Hong Kong.

SOE investment in Australia• Dominated by long-established central SOEs• Wide variety of entry strategies – dominated by M&A• SOEs are behaving like international companiesChinese companies already in AustraliaChinese investment by energy sectorCoal projects attracted the largest investment (approx50%) closely followed by gas (43%). Chinese SOEsoverwhelmingly the dominant investors, accountingfor 99% of investment. There are spillover benefits toother Australian industries as well, including finance,professional services and infrastructure.Although M&A is the most dominant form of Chinese ODI inAustralia, the variety of entry strategies used by large ChineseSOE's is the second notable point. And third, Chinese SOEs arebehaving similarly to other international investors in Australia.Mining and gas = 92% of deal value 2006-12China’s largest energy companies have rapidly increasedtheir stakes in Australia’s energy sectors in recent years.There were 24 deals completed over last 6 years witha total of US$12.8 billion. 6 of these deals were overUS$1 billion.Financing challenge• Australia’s total energy production (excluding-uranium)is expected to more than double by 2035.• Significant funding challenge. Australian Treasuryestimates more than A$200 billion will be needed onnew generating capacity by 2050• Foreign capital is vital. Chinese companies remain veryinterested in making long-term energy and infrastructureinvestments in Australia• Significant opportunities for an era of beneficial newstrategic partnershipsNext step forward• Chinese investment in Australia’s energy infrastructurenot equivalent to China’s share in offtake from coalmines and gas fields• Chinese investors want active participation with Chinesebanks increasingly active in international syndication• Trade relationship needs to be underpinned by anappropriate investment relationship to help secureAustralia’s long-term prosperity• Trade relationship needs to be underpinned by anappropriate investment relationship to help secureAustralia’s long-term prosperityThe full report can be found:http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/china-insights/Documents/demystifying-chinese-investment-2012.pdfSTART YOUR LTD. AT 12/12/12 FORcontact us: services@triple-eight.hk / +852 2527 0738terms & conditions: www.triple-eight.hkIN BUSINESSTIMING IS EVERYTHING