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ECON2500 > Lecture 7 (MCQ and SAQ) > Flashcards

Lecture 7 (MCQ and SAQ) Flashcards

1
Q

Top 3 receivers of China’s ODI, by region 2005-2015

A
  1. USA (close to USD 100b)
  2. Australia (USD 78.6b)
  3. Canada
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2
Q

Growth rates in China’s ODI - US and Australia 2005-2015

A

30% Compound Annual Growth Rate

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3
Q

When did China’s ODI begin to grow at a high rate?

A

2005, 2016 one of strongest years

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4
Q

China’s ODI accounts for over ….. of the world’s ODI

A

10%

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5
Q

Acceleration of ODI in 2016 triggered

A

Scrutiny from Chinese gov

- Tightening capital controls to mitigate depreciation of the Renminbi

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6
Q

Analysis of ODI in China, includes/excludes:

A

Excludes:
- personally owned residential real estate
- portfolio investments such as stocks and bonds which do not result in ownership control
- investments under USD 5 million
Includes:
- Real estate not personally owned (commercial, industrial, residential buildings)

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7
Q

Chinas ODI to the world in 2015, 2016

A

USD 118 - 143b (2015)

Almost USD 200b (2016)

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8
Q

ODI to Australia in 2015

A

11 billion (32% ^ from 2014)

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9
Q

China’s ODI is transitioning from …, to other industries, such as …. and …. (in Australia)

A

Mining, Health, Agribusiness

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10
Q

Investment in Real Estate accounts for … of China’s ODI in Australia

A

45% (AUD 7b)

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11
Q

Chinese private investors accounted for … of China’s ODI in Aus

A

78%

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12
Q

Fastest growing investment in a secondary industry:

Severe contraction in …

A

Construction (27% CAGR)

Mining

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13
Q

Fastest ODI growth (in medium term 2011-2014) in Tertiary Industry

A

Health (189% CAGR)
Culture, Sports, Entertainment (70%)
ICT (60%)

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14
Q

Faster ODI growth (in short tern 2013-2014) in Tertiary Industry

A

Health (801%)
Water, Environment (281%)
Hotels and Catering (198%)

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15
Q

Chinese ODI in Australia, by Industry 2015 (Top 3)

A 
Real Estate (45%)
Renewable Energy (20%)
Healthcare (17%)
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16
Q

Chinese ODI in Australia, Key Transactions (Top 3)

A

Pacific Hydro
Investa Office Portfolio
Swisse Wellness

17
Q

2015 was the first year in which SOE/Private surpassed SOE/private Chinese ODI in china

A

SOE, Private

Driven by: Investe and Pacific Hydro investments

18
Q

Top Reasons for China’s ODI

Rationale for Investing in Australia:

A
  1. Make profits
  2. Secure resources
  3. Build and international brand
  4. Access global markets
  5. Gain experiences for operating in overseas markets
19
Q

Top Reasons for China’s ODI

Reasons for Choosing Australia:

A
  1. Long term stable returns
  2. Low sovereign risk
  3. Stable policy environment
  4. Mature financial markets
  5. Transparent legal system
20
Q

China’s ODI in Aus, Real Estate
…. of investment went to …
(TOP)

A

94%, NSW

21
Q

China’s ODI in Australia, by Region (2015) - States

A
  1. NSW (49%)
  2. VIC
  3. QLD
  4. NT
  5. SA
  6. WAS
22
Q

China’s ODI in NSW, by Industry

A

Real Estate (86%)
Healthcare (13%)
Agribusiness (1%)

23
Q

China’s ODI in Victoria, by Industry

A

Renewable Energy (59%)
Healthcare (32%)
Real Estate (6%)
Agribusiness (3%)

24
Q

China’s ODI in QLD, by Industry

A

Mining (88%)
Real Estate (7%)
Agribusiness (5%)

25
Q

China’s ODI in Northern Territory, by Industry

A

Infrastructure (90%)

Agribusiness (10%)

26
Q

China’s ODI in South Australia, by Industry

A

Energy (93%)

Agribusiness (7%)

27
Q

China’s ODI in Western Australia, by Industry

A 
Mining (87%)
Real Estate (13%)
28
Q

Top Chinese ODI Industry in each state

NSW, VIC, QLD, NT, SA, WA

A 
NSW - Real Estate
VIC - Renewable Energy
QLD - Mining 
NT - Infrastructure
SA - Energy
WA - Mining
29
Q

China-Australia Managerial Challenges

A
  • China’s corporate culture more hierarchal, command and control in Aus more horizontal and egalitarian
  • China head offices tend to play a key role in local operations without detailed local knowledge
  • Dealing with Aus trade unions is difficult
  • Regulatory burden in Aus is high, relative to China - high cost of doing business

ECON2500 (6 decks)

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