David Sun, managing director of Sinosteel Australia, a subsidiary of China’s state-owned steelmaker Sinosteel Corporation, stated that the growing diplomatic dispute between Australia and China ongoing for the past few years, including a series of defense, trade and foreign policy disputes, is leading Chinese investments in the country to draw back, as reported by Bloomberg.
It is reported that the country’s Foreign Investment Review Board was rejecting Chinese investors and scaring off many others. However, Mr. Sun is optimistic, expecting investments to increase in the future due to the complementary economy between the countries.
In the current market conditions with high inflation, rising project costs and concerns regarding the future of the steel market, it is difficult for Australian companies to receive financial support. Therefore, Chinese investments in the country remain important, also due to the need for new green projects amid the global transition to low-carbon steelmaking.
In 2020, Chinese state-owned steelmakers were notified to stop importing coking coal from Australia, reflecting the tension between the two countries, as SteelOrbis previously reported. At the time, Chinese customs were not clearing coking coal cargoes waiting at ports even though there was no official ban on imports of the steelmaking raw material. However, early this year China started to accept Australian coking coal imports as it struggled to meet demand in its domestic market.