The proverb, “in the land of the blind, the one-eyed man is king,” is fitting when it comes to investing, or seeking investors, in the Aus-China sector.
Fake news, biased news & no news frequently leads to investor paralysis, unless they have access to a leading light to guide them.
It’s even more complicated now that the USA has entered the arena, with geopolitically motivated news from both sides muddying the economic waters.
China’s President Xi reportedly told foreign leaders ‘we must all make sure the world we live in does not descend into the chaotic warring seven kingdoms of Westeros,’ according to the South China Morning Post on the weekend.
He surprised both his own aides and the guests by referring to the hit HBO TV series, Game of Thrones. (Reportedly, he watches a condensed version with the naughty bits edited out).
He may also be obliquely reminding the domestic audience of China’s own Game of Thrones, around 475 – 221 BC, during the ‘Warring States Period’ of internal division when seven warring kingdoms sought power and laid waste to the land.
I will elaborate at my China Angle investment seminars in Brisbane, Friday 10 May, and Perth, Wednesday 22 May, sponsored by Deloitte. Click here to register. $90 plus GST early-bird rates
But here are some appetisers.
- The coming energy war. China is the world’s biggest buyer of energy, and with their important suppliers, Iran and Venezuela, under US sanctions, (while the US is emerging as an energy exporter), expect both oil prices and demand for alternative energy sources and technology to rise.
- Financial markets have priced in a resolution to the US-China trade war. But the recent failed Trump-Kim meeting offers a worrisome lesson on negotiations amongst two nations with very different business and political cultures.
- The Chinese government has successfully pulled its many internal levers to reduce domestic economic risks. So it is unlikely to accede to any last minute trade demands from the US side (but see 1 above as a new risk).
- That some smaller EU nations have joined China’s Belt and Road Initiative indicates a ‘bird in hand’ (economic benefit) is worth ‘beating around the bush’ (taking a neutral geopolitical stance between the rival superpowers for as long as possible) for these nations.
What does it mean to Chinese and Australian investors and businesses, particularly in property, food, tourism, technology, energy, professional services and wealth management? Find out at the China Angle Brisbane and Perth seminars.
Meanwhile, 74 Significant Investor Visas (SIV) were granted to Chinese millionaire migrants in the 5 months to November 2018, according to the Australian newspaper last week which obtained the data under Freedom of Information laws.
SIV is Australia’s investment migration visa category since 2012 for wealthy investors. It has resulted in some 2100 millionaires, 87% from China, gaining temporary residency when investing $5 million each into defined investment fund categories. (Total $10.5 billion)
Annualised, the 74 equates to 178 Chinese nationals per year. However the Australian reported that in the last financial year, 139 (of a total of 183) visas were granted to Chinese nationals, equating to only 76% of the total.
This suggests 98 visas were granted to all nationalities in the 5 months to Nov 2018 if the same 76% ratio is assumed this current year. So annualised, we can expect 235 SIVs granted this financial year, which would be a 28% rise on last year’s numbers.
The implications for investment opportunities in Australian venture capital, ‘small cap’ ASX stocks, and ‘balancing’ investments such as commercial property, will also be discussed at my Brisbane event, next week on 10 May…and on 22 May in Perth.