Foreign Investment and Australian Independence
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The latest figures from the Australian Bureau of Statistics show Foreign Direct Investment (FDI)* reached a record $967.5 billion at the end of 2018. That’s an increase of $84 billion or 9.5% from 2017. It is what capitalist investors would call “a strong result” and bucked the trend among developed capitalist economies which mostly saw decreases in FDI for the year.
What are they investing in?
The overwhelming portion of FDI in Australia goes into our mining and resources industry. At the end of 2018, approximately 38% ($365.5 billion) of all FDI was in mining. That is more than the three next largest sectors combined – manufacturing ($108b), financial services ($108b), and real estate ($103b).
The significance of that level of foreign investment in the mining and resources industry should be clear when we consider that approximately just over 50% of all Australian exports come from this same sector. So not only does foreign capital dominate the development of Australia’s vast resources industry, it also has a major bearing on Australia’s trade and our wider economy as a whole. What’s more, nearly 80% of Australia’s mining and resources industry is owned by foreign multinationals and investors. It is in this sector of the economy that imperialism’s grip on Australia is most stark.
China rising, but US still top dog
Recently, it’s not unusual to hear concerns from some sections of the people that Australia is being “taken over” by China. But what do the statistics say?
In terms of FDI, China had just over $40 billion invested in Australia at the end of 2018. That’s five times less than the US. But China’s levels of investment have certainly been increasing. In 2008, China had just $3.6 billion in FDI in Australia, meaning its total stock has increased 11-fold in the last 10 years.
On the other hand, US direct investment increased just over 2-fold in the same period of time. But that 2-fold increase was the equivalent of over $100 billion – more than 2.5 times China’s total FDI to date!
A look at total foreign investment levels in Australia, of which FDI is just a part, paints a similar picture. FDI made up just 28% of all foreign investment here in 2018. 52% was in portfolio investment**.
According to ABS statistics, the leading investor countries in Australia by all types of foreign investment at the end of 2018 were:
1. United States of America - $939.5b (27%)
2. United Kingdom - $574.8b (16%)
3. Belgium - $316.9b (9%)
4. Japan - $229.3b (7%)
5. Hong Kong - $118.8b (3%)
9. China - $63.6b (1.8%)
If Hong Kong’s numbers are added to China’s the picture changes somewhat, but the conclusion remains the same. While China may be the new global power on the rise, it is still far and away the United States that is top dog when it comes to foreign investment in Australia.
For revolutionary anti-imperialist independence, not narrow xenophobic nationalism
The strong opposition to foreign investment among the Australian working class and people feeds into the stream of struggle for Australian independence. But we cannot allow this opposition and struggle to be based on racism and xenophobia or narrow reactionary nationalism. We shouldn’t oppose foreign investment just because it comes from a country whose people speak a different language or aren’t white.
Our support for Australian independence and opposition to foreign investment must be based on fact, not fear mongering and irrationality. Yes, Chinese investment and interest in Australia and the region is increasing, but it is the United States that has already “taken over” Australia. It dominates economically with its multinational corporations controlling important sectors of our economy. It dominates militarily with its bases and marines on Australian soil and integration of our military into the US imperialist war machine.
**Portfolio investment is defined as foreign ownership of less than 10% of a company
ABS statistics can be found here: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5352.02018?OpenDocument
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