From security concerns to China's role in the COVID-19 outbreak, it's common knowledge that the relationship between Australia and China is at the end of its tether.
And there is also the question about how much Australian land China owns.
While the Australian government has tightened rules for foreign buyers of agricultural land in recent years to protect its own interests, not much has been done about existing ownership of land by foreign countries.
Social media and some other sources claim that China owns the lion's share of foreign-owned agricultural land in Australia.
But here's a closer look at how much of Australian farmland is in fact owned by China and other nations, and what this means for Australia's economy.
What is the Agricultural Land Register and how does it work?
The Register of Foreign Ownership of Agricultural Land (the Agricultural Land Register) was established to provide more transparency about the level of foreign ownership of Australia’s agricultural land.
An interest in agricultural land includes a freehold interest or the right to occupy land under a lease (including a sublease or licence) where the term of the lease or licence (including any extension or renewal) is reasonably likely to exceed five years.
It is essential to note the register records foreign person entities that own a 20 per cent or more share in Australian farmland. This means there may also be a significant portion of Australian ownership in those same parcels of land.
How much of Australia's land is owned by foreign countries?
According to the 2019 Agricultural Land Register report, the total area of agricultural land in Australia with a level of foreign ownership has fallen from 52.6 million hectares at 30 June 2018 to 52.1 million hectares at 30 June 2019.
Using the Australian Bureau of Statistics (ABS) measure of total agricultural land area in Australia, the estimated proportion of agricultural land with a level of foreign interest at 30 June 2019 was 13.8 per cent.
The level of foreign interest in agricultural land has remained relatively stable over the past four years as represented below:
Proportion of agricultural land with a level of foreign ownership between 2015-2019
So, how much of this is owned by China?
According to a government report on foreign ownership of agricultural land, Chinese investors are in fact one of the largest foreign entities with an interest (leasehold and freehold) in Australian farmland.
Their investments increased by 0.5 per cent, bringing Chinese interests' total area of Australian agricultural land to 9,199,000 hectares or 2.4 per cent over the period to June 2019.
Investors from the United Kingdom also have 2.4 per cent ownership interests in Australian land, followed by the Netherlands (0.7 per cent) and the US (0.6 per cent).
United Kingdom investors, however, decreased this investment in 2019 by a significant 9.5 per cent to a total of 8,166,000 hectares, meaning in terms of volume, China now sits ahead of the UK.
Essentially, the gap between the two largest foreign farmland owners has grown further, with all other nations having significantly less Australian agricultural property investments.
What does this mean for Australia's economy?
Chinese investors view Australia as fertile ground to produce goods that they’ll sell back in China. There’s heavy demand from China’s booming middle class for Australian-produced fruits, meats, wine, dairy and minerals.
But as mentioned earlier, there may also be a significant portion of Australian ownership in those same parcels of land owned by China within the ambit of the law.
While Australia relies heavily on foreign investment. China ranks only ninth as an investor in Australia, with a 3 per cent share of total foreign direct investment.
Experts are of the opinion that Foreign Investment Review Board (FIRB) figures refer to scale, not output. Therefore, any country by virtue of just owning land does not add or takeaway from the economy of Australia.
There is little to fear in terms of Chinese investors in Australian land as this does not mean that they are the largest in terms of output. So these figures essentially add little to the growth of the Australian economy.
The latest ‘Demystifying Chinese Investment in Australia’ report, by KPMG and the University of Sydney’s Business School, assessed that China’s investment boom cycle in Australian and global agriculture seem to be over.
Chinese investment in Australia declined by 18 percent in 2020, from US$ 2.4 billion (A$3.4 billion) in 2019 to US$ 1.9 billion, which amounts to a decline of 26.8 percent.