Australia faces similar problems with Chinese investment

The front page of Saturday’s Weekend Australian showed a disconsolate Chinese dairy investor standing on a Gippsland, Victoria, property on which his company Ningbo Dairy Group had hoped to farm 1000 dairy cows. The plan was to house the cows in barns and produce milk for bottling in a A$6 million bottling plant on another property for airfreight as fresh milk to China.

 

But in spite of encouragement from the Victorian State government  and against the recommendation of its own planning department, the local Bass Coast Shire Council has rejected the application after receiving 430 objections to Ningbo’s plans. The justification for the decision is the incompatibility of the barn and bottling shed with surrounding land use, although the farms are zoned for agricultural production.

 

The Council denies the seven councillors were swayed by the strength of local opposition or the issue of foreign investment, but it is hard to believe this played no part. Objections ranged from the  reasonable – effluent and drainage issues, large increase in daily truck movements, and impact on tourism and the landscape – to the xenophobic, such as the company is Chinese, the milk would be flown to China, Chinese workers could be imported to staff the operation, and the investors are only interested in profit.

 

Victoria’s state planning policy which the council is obliged to follow decrees agricultural development should be encouraged in Gippsland and land-use conflicts resolved because of the need to foster economic growth in the region. However expansion plans must be sustainable and consistent with orderly planning. It is not clear how this apparent impasse between State and local government will be resolved.

 

New Zealand has its RMA to guide decisions like this which would have at least provided a forum for evaluating the pros and cons. The Chinese investors have not yet decided whether to appeal the rejection, but it is uncertain if this will produce a more favourable outcome.

 

The issues at stake are similar to New Zealand, but we seem to have achieved a more consistent method of refereeing between diametrically opposing viewpoints.

 

New Zealand should also be thankful it has its FTA with China already in place, negotiated by a Labour government, whereas Tony Abbot’s government is facing opposition to its proposed ChAFTA. The opinion polls are narrowly in favour, but the Labor opposition leader Bill Shorten is trying to have it both ways. Under Gough Whitlam Labor developed a very good relationship with China, but 20 years later the Trade Unions are pushing Labor to vote against the FTA because of the fear Chinese workers will be entitled to take Australian jobs.

 

There is no doubt many Australians are trying to resist the impact of foreign, specifically Chinese, investment and the political parties are either in favour in the Liberal government’s case or torn by dissent in Labor’s.

 

Returning to the specific issue of the Ningbo Dairy Group, it is not difficult to imagine the uproar if this was a New Zealand problem, certainly from at least one political party. The investment by Shanghai Pengxin in the Crafar farms as well as other South Island partnerships provides ample evidence of this, although the high cost of our farm land may make it unlikely it would be viable to set up a fresh milk operation.

 

However the main differences between the Ningbo and Pengxin investments seem to be the ownership structure and the requirement for New Zealand participation in the ventures. Perhaps the Chinese investors in Australia’s dairy industry need to look for local partnerships to make them more acceptable, but realistically this may not have made much difference in Ningbo’s Gippsland investment. Local objections and the lack of an equivalent to the RMA already appear to have prevented it from going ahead.

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