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Hockey issues fresh invitation to Chinese investors as Aust cashes in on China corruption crackdown
Topic Started: 29 Aug 2014, 06:56 PM (2,351 Views)
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We need foreign investment to grow: Hockey

Treasurer Joe Hockey has issued a fresh invitation to Chinese state-owned enterprises to invest in Australia.

In a keynote speech to a conference in Sydney, the treasurer said Australia is going through significant change and needs to engage with global investors if the country is to continue to grow.

Mr Hockey said while Australia is economically resilient and strategically located there is "tremendous global competition".

"If Australia is to take advantage of the opportunities presented we will require additional capital," he told a foreign investment roundtable on Friday.

"We need to make sure foreign investors continue to invest."

In particular, he said the coalition government is very welcoming of Chinese investment, including that by state-owned enterprises (SOEs).

Chinese SOEs are increasingly looking towards Australia for new opportunities as China loosens its restrictions on outbound investment.

"So we are working to make sure that Australia is ready," he said.

China represents Australia's sixth largest source of inward direct foreign investment at $20.8 billion in 2013.

The two largest sources of investment are from the US ($149.5 billion) and the UK ($86.7 billion).

He said the government has done an enormous amount of work on a free trade deal with China and is hopeful of bringing that to fruition by the end of the year.

Read more: http://www.businessspectator.com.au/news/2014/8/29/china/we-need-foreign-investment-grow-hockey
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How Australia is cashing in on China's corruption crackdown

Fergus Ryan

When NSW Deputy Premier Andrew Stoner took a weekend trip to Hong Kong a couple of weeks ago, he managed to come home with a $10 million beef export deal under his belt. But that’s not all.

Stoner also made time for a quick detour across the border into mainland China for another sales pitch: In the southern city of Shenzhen, it wasn’t Australian beef he was selling, but visas.

On August 17, two weeks before it was announced to the Australian press, the Shenzhen Economic News had a big splash, with the headline “Australian state of NSW no longer requires investment in government bonds for Significant Investment Visa”.

The Deputy Premier had announced to his Chinese audience in Shenzhen that his government would scrap the requirement for overseas investors to buy $1.5m out of a total $5m in government ‘Waratah’ bonds, starting in September.

This week, back on home soil, Stoner announced the change and said it was designed to make it easier for Chinese investors, and to give them more choice.

Earlier this year, analysis from the real estate advisory arm of Korda Mentha showed that the scheme brought in at least $440 million to the Australian economy, or around $4 million per day in 2013 (China's Great Wall of visa money, 5 February 2014).

David Chin, managing director of BasisPoint and an SIV expert, says the move means investment providers now have a greater incentive to promote NSW, as the Chinese will now have $5m to invest rather than $3.5m.

“It will provide a level playing field between NSW and other Australian states to attract SIV investors,” he says.

Between November 2012 and the end of May 2014, state governments issued 1,145 invitations, while 928 applications were lodged. Just over 90 per cent of those applications came from China.

The figures also indicate that Victoria has been more proactive in approaching Chinese investors, having sent out almost double the amount of invitations as NSW.

With NSW’s announcement, the competition looks set to heat up now.

Luke Malone, a director at advisory firm Prosperity Advisers, says applicants may start to favour NSW over the other states as funds previously invested in Waratah bonds move to other asset classes.

“Applicants may find higher-yielding investments such as SIV-compliant managed funds or active business investments assets more attractive as a result” he says.

The inter-state competition is unsurprising when you consider the extremely high demand and increasingly tight global supply of premium investor visas in countries such as the US, Canada and Australia.

According to a recent report by Shanghai research firm Hurun, 64 per cent of Chinese people worth more than $US1.6m are either getting out of the country now, or they’re making plans to do so.

The demand is so high that the equivalent program in the US -- known as the EB-5 -- has been tapped out already for this financial year. That means 10,000 people -- 85 per cent of which are Chinese -- have been willing to pony up $US500,000 to move to the US. The annual US quota restarts on 1 October for another 10,000 places.

Canada, which was running the cheapest program, has had to shut it down after being swamped by applicants.

What is not mentioned in the survey but is undoubtedly a major factor behind the mass exodus of China’s wealthy, is the sweeping crackdown on corruption that has been underway since late 2012.

For many of those corrupt officials and business people, cheaper options with less stringent requirements have started to pop up in cash-strapped European countries.

Spain, Greece and Portugal are now offering citizenship in return for investments into real estate of over €500,000, says Jonathan Sykes, a partner at Premium Finance Group in Beijing.

“Others like Hungary offer almost instant permanent residency in exchange for investments in Government bonds,” he says.

However he also warns these schemes reek of desperation and their long-term viability is unclear.

“We think Chinese investors who go into these schemes tend to be looking for a quick fix rather than a long-term change” he says.

And as premium supply of investor visas continues to tighten, Australia is in a prime spot to profit from wealthy Chinese who are looking for smart investments rather than just a safe haven.

Read more: http://www.businessspectator.com.au/article/2014/8/29/china/how-australia-cashing-chinas-corruption-crackdown
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Leodwald of Portsburgh
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"Foreign Investment" is code for wholesale sellout. I guess smokin' Joe needs to pay for his Cigars somehow.

Yeah, just who you want for a neighbor - a corrupt F communist. Just goes to show the moral depths this country is willing to plumb for a few lousy dollars.

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Earlier this year, analysis from the real estate advisory arm of Korda Mentha showed that the scheme brought in at least $440 million to the Australian economy



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scheme
skiːm/
verb

1.
make plans, especially in a devious way or with intent to do something illegal or wrong.


Hahaha, a country destroyed by F Real Estate F Agents.
Edited by Leodwald of Portsburgh, 29 Aug 2014, 07:21 PM.
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Ex BP Golly
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Leodwald of Portsburgh
29 Aug 2014, 07:14 PM
"Foreign Investment" is code for wholesale sellout. I guess smokin' Joe needs to pay for his Cigars somehow.

Yeah, just who you want for a neighbor - a corrupt F communist. Just goes to show the moral depths this country is willing to plumb for a few lousy dollars.








Hahaha, a country destroyed by F Real Estate F Agents.
Cant disagree with you this time Leod'

Damn.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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JanesAddiction
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I thought Chinese SOEs were owned and run by the PLA. Joe Hockey wants a foreign military to invest in Australia?
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Govt mulls Chinese property fee hike

The federal government is actively considering imposing extra stamp duties or fees on Chinese property purchases in Australia at the same time as Treasurer Joe Hockey is encouraging more investment between the two countries.

According to The Australian Financial Review, the parliamentary committee looking for a solution to Australia’s housing affordability crisis is looking at several options, one of which is extra scrutiny or fees for foreign buyers.

“Obviously this is an issue that needs to be considered,” said MP Kelly O’Dwyer, the committee chair, to the newspaper of a capital charge.

The news comes on the back the Treasurer’s speech to the Foreign Investment Roundtable in Sydney on Friday, where he stressed Australia’s desire for more direct investment from China.

“On my recent trip to China I made it clear that Australia was ‘open for business’ and that we welcomed Chinese investment,” said Mr Hockey.

Read more: http://www.businessspectator.com.au/news/2014/8/30/national-affairs/govt-mulls-chinese-property-fee-hike
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Leodwald of Portsburgh
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Ex BP Golly
29 Aug 2014, 08:55 PM
Cant disagree with you this time Leod'

Damn.
I sense a disturbance in the force. I might have to reconsider my position.
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Ex BP Golly
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JanesAddiction
29 Aug 2014, 10:56 PM
I thought Chinese SOEs were owned and run by the PLA. Joe Hockey wants a foreign military to invest in Australia?
Check out the UN Convention Against Corruption. China along with Australia are parties. It has many provisions, most interesting are the provisions for the return of assets.

The Communists have been investing here for many years :D
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China seeks Australian help in corruption crackdown

October 20, 2014
Philip Wen

Beijing: China is seeking the extradition and seizure of assets of corrupt officials who have fled to Australia with illicit funds running into the hundreds of millions of dollars.

In an unprecedented joint operation with its Chinese counterparts, the Australian Federal Police is poised to make their first forfeiture of assets within weeks, having agreed on a priority list of alleged economic fugitives who have taken root in Australia – identified by Beijing as one of the most popular outlets for corrupt Chinese money.

Among the suspects identified by the AFP are naturalised Australian citizens and permanent residents who for years have laundered money under the guise of being genuine investment or business migrants from China.

"They don't all of a sudden leave overnight and take a bag of money with them. In some cases they're very carefully planned," Commander Bruce Hill, the manager of the AFP's operations in Asia, told Fairfax Media.

A typical scenario involves officials sending their spouse and children overseas, often using them as a conduit to shift assets offshore. With barely any assets to their name, the so-called "naked official" – as is the popular term for them in China – is then able to join their family overseas at the first whiff of trouble.

"As time goes on, they start to put [their funds] into legitimate assets such as houses and property and shares and bank accounts and then the money becomes their wealth," Mr Hill, who is based in Beijing, said. "But it's never been their money to start with in the first place; it's the corrupt money flowing out of China."

The sums of money believed to have been spirited out from China are staggering. The Washington-based Global Financial Integrity group, which analyses illicit financial flows, estimates about $US3 trillion flowed out of China illegally between 2005 and 2011 alone.

Since taking power in November 2012, President Xi Jinping has directed a wide-ranging anti-corruption drive aimed at regaining credibility from a public disillusioned with endemic graft in the Communist Party, while also striking fear into his opponents.

The impetus for the joint operation has come from a campaign launched in July – called Operation Fox Hunt – to track down corrupt officials overseas, and to deter others from absconding.

"It's extremely difficult for public servants to go abroad now," said Lin Zhe, an anti-corruption expert at the ruling Communist Party's in-house training institution, the Central Party School. "The passports of department heads and above are withheld by the Organisation Department. When I first came to the Central Party School, there were many [international] exchanges, but this rarely happens now."

The priority list agreed between the Ministry of Public Security and the AFP was culled from a broader list of "less than a hundred people", Mr Hill said, adding that the assets being pursued by China in Australia were in the "many hundreds of millions of dollars".

Mr Hill said the AFP was not party to any information Chinese investigators may hold relating to Communist Party links a suspect may have.

"We only see what's on face value, this person has committed an offence," he said. "There is a human rights side; we need to make sure that we're monitoring that as well, that this is not done for political expediency where we can."

The federal government's Significant Investor Visa scheme has proven overwhelmingly popular among Chinese investors, who account for 90 per cent of applicants so far. But the difficulty in verifying the source of Chinese income, had seen delays in approvals.

In announcing a new "premium" investor visa last week, which allows applicants who invest $15 million to gain permanent residency after one year, the government said it would "strengthen integrity measures" to ensure the migration programme was not misused.

Read more: http://www.smh.com.au/world/china-seeks-australian-help-in-corruption-crackdown-20141020-118kl3.html
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So, If a lot of this money has ben poured into housing and property in Straya and then the AFP and China move in to seize these properties what would the outcome be and how would the flow of money being stopped impact.
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JanesAddiction
29 Aug 2014, 10:56 PM
I thought Chinese SOEs were owned and run by the PLA. Joe Hockey wants a foreign military to invest in Australia?
Nope. The PLA did run quite a lot of businesses up to about 2000, when Jiang Zemin required the PLA to divest, and they then became privately-owned enterprises.

There is still the Poly group, which is rumoured to be largely PLA-controlled, but it is not a SOE.

The SOEs are owned by the state, not the army.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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