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Has the other great Chinese investment boom peaked?

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China’s huge outflow of students has hit the brakes, according to the latest figures from the Chinese Ministry of Education.

While the 413,900 Chinese people studying abroad in 2013 represents a 3.5 per cent increase on 2012, it’s a huge dropoff from the 20 per cent increase per year seen over the past five years, according to Fairfax.

The collapse in Chinese student growth around the world will undoubtedly hit the popular education destinations like the USA, Britain and Canada, but Australia, which is the fifth most popular destination for the world’s international students, is faring surprisingly well.


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Source: Austrade

In fact, while the growth of Chinese international students is slowing, Australia has just registered its first increase in Chinese student enrolments since 2010. Even if it only rose by 539 students from 2012 to 2013, that still represents $20.7 million in extra cash coming into the economy.

More Chinese students enrol to come to Australia each year than Indian, South Korean, Thai and Vietnamese students combined.

And education is the quiet champion of Australian exports, coming in fourth place as per the chart below, just behind gold.


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Source: Minerals Council of Australia

The total number of international students last year was 526,932 (across all types and levels of education), making Australia the fifth most popular destination in the world. Here’s how other countries are faring:


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We don’t skimp when it comes to a degree either. Australia is the most expensive destination in the world for international study, according to a HSBC report. It costs the average international student more to study in Australia than the USA, UK, the United Arab Emirates or Canada.

Universities make the most out of international students because, while Australian and New Zealand citizens are eligible for government assistance, foreign students pay the full fee -- for almost all the courses it’s a small fortune, as this chart shows.


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An international student who wants to study at the University of Melbourne or University of Sydney will be lucky to get out for less than $100,000. And if that student wants to study a bachelor of medicine and surgery at the University of Sydney he or she will have to shell out a staggering $250,520 for the four years.

While those two universities may be particularly pricey the cost is substantial across the board.

The cost of housing, which helped make Australia the world’s most expensive study destination in 2013, averaged $US13,140. And the average spent on fees was $US25,375, meaning that each international student spent an average of $US38,512 per year, according to the HSBC study. That’s $US2811 more than the USA, $US8191 more than the UK and $US12,505 more than Canada.

By comparison, here’s how much it costs international students to study in other countries.


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Of course, students are coming for more than just university, the below chart shows the breakdown since 1994.


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International students are the overlooked cash cow of the Australian economy. Supply has been rising to meet demand for decades but it’s now clear that Australia is better placed than the rest to continue to make the most of global students, particularly the Chinese, than its competing countries. If the slowdown in international Chinese students numbers continues then Australia will have to look for new ways to satisfy this enormous market.

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Forget property, Australia's economy relies heavily on Chinese investing in themselves. But are we pricing ourselves out of the market?

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Twitter boss heads to China

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Twitter Inc CEO Dick Costolo will meet Shanghai government officials, academics and students in his first visit to China, signalling Twitter's interest in cracking a lucrative but thorny market with 600 million internet users.

Twitter, which has been blocked by Chinese censors since 2009, described the trip as a personal tour for Costolo, who is due to land at Shanghai's Pudong International Airport on Monday and plans to spend three days in the business capital. He is not scheduled to visit Beijing.

Costolo is scheduled to meet Shanghai government officials — including representatives of the Shanghai Pilot Free Trade Zone, established in 2013 to test market liberalization measures, such as looser rules governing currency conversion and foreign direct investment. But officials have denied media reports that Internet restrictions and censorship, including the blocking of Twitter, will be loosened there.

Unlike at Facebook Inc, whose CEO Mark Zuckerberg is a frequent visitor to China and has openly spoken of his desire to enter China to fulfill his vision of connecting the world, Twitter's senior management has played down the likelihood of seeking a license to do business there.

But Costolo's trip is bound to stoke speculation about the company's ambitions in the country. Major internet companies including Google Inc and Yahoo Inc have been hampered by Chinese government intervention. Google pulled out of mainland China in 2010, unwilling to accept what it argued was heavy-handed censorship of the internet.

Any attempt to enter China with Beijing's approval would be a delicate proposition for Twitter, which takes pride in its reputation for defending free speech and rebuffing government requests for private user data.

In a statement to Reuters, Twitter declined to disclose what Costolo intended to bring up with Chinese officials.

"Dick is visiting China because he wants to learn more about Chinese culture and the country's thriving technology sector," a Twitter spokesman said.

Costolo is not expected to ask Chinese authorities to lift the Twitter ban. Twitter has flatly rejected the possibility of opening an office anytime soon in China, which would subject the company to Chinese law.

The CEO, who has never set foot in the country, will also meet university administrators and participate in a round-table discussion with students at Fudan University in Shanghai, the official sponsor of his visa.

Circumventing censorship

Costolo's visit comes at a time when the Chinese government, two years into President Xi Jinping's administration, persists in a campaign to clamp down on bloggers and dissident voices on social media platforms like Sina Corp's Weibo, which closely resembles Twitter.

In June, Costolo told the American Society of News Editors convention that he would "love to be able to run Twitter as Twitter in China," but added that "we are not going to sacrifice the principles of the platform and the way we think users should be able to communicate in order to do so."

Even if it does not establish an official presence in China, Twitter has avenues to make money from China. For instance, Twitter's subsidiary MoPub, which serves up ads inside mobile apps, counts many small Chinese app developers among its customers, while Beijing-based PC-maker Lenovo Group Ltd is an advertiser on Twitter itself.

Despite the official ban, Twitter, which has 250 million monthly users around the world, has maintained an active, if relatively small user base inside China. While some estimates have placed the number of Chinese users in the tens of millions, just 0.05 percent of all tweets in 2013 were written in Chinese, according to Colorado-based social data provider Gnip, which analyses Twitter output.

Many savvy Chinese netizens and even state-run media organisations regularly use virtual private networking (VPN) technology to circumvent censorship.

Dissident artist Ai Weiwei, to name one, has tweeted more than 105,000 times and boasts more than 238,000 followers. The state-run Xinhua news agency, official broadcaster China Central Television, and Hu Xijin, the influential editor of the pro-government Global Times newspaper, all maintain active Twitter accounts.

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Dick Costolo will meet Shanghai government officials, academics and students in his first visit to China.

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Rail chief backs FTA with China

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The head of Australia's largest rail company, Aurizon, says a free trade agreement (FTA) with China is critical to the country's economy.

Aurizon chief executive Lance Hockridge told a gathering in Canberra that the best way for Australia to capitalise on major economic opportunities with the world's second-largest economy was through a bilateral free trade deal.

"It is critical that we build on this momentum to enshrine a permanent connection between our complementary economies," Mr Hockridge told the Australia China Business Council on Monday.

"With an import market of around $10 trillion worth of merchandise in the next five years, and at least $US500 billion in outward Chinese investment expected over the same period, together we have a major opportunity.

"But there is fierce competition for this investment and Australia cannot be complacent."

He said a FTA would enable deeper trade and investment co-operation between the two nations.

"We all know which economy will be the largest in the world, and we also know that Australia has a crucial role to play in that growth."

Prime Minister Tony Abbott is expected to focus on an FTA with China when he visits the country next month.

China is Australia's biggest trading partner and an FTA is expected to boost Australia's beef and diary industries and open up trade in education, telecommunications and financial services.

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Aurizon chief executive Lance Hockridge warns against complacency in trade relationship with China.

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China new home price growth eases

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Chinese new home prices lifted at a slower pace in February, while foreign direct investment also rose, official data shows.

Average new home prices in 70 cities rose by 8.2 per cent in February compared to a year ago, slower than a rise of about 9 per cent in January.

Prices edged up by 0.3 per cent in February when compared to the previous month.

The country attracted $19.3 billion of foreign direct investment (FDI) in January-February, up 10.4 per cent year over year, the Ministry of Commerce said.

The ministry didn't break out February data. Statistics for the first two months of the year are often combined to reduce distortions from the Chinese Lunar New Year.

The ministry previously reported January FDI at $10.76bn which was 16.1 per cent higher year over year.

If there were no adjustments in the data February alone would be $8.54bn, according to calculations by The Wall Street Journal. FDI in February last year was $8.2 billion.

Outbound investment, or nonfinancial overseas direct investment, was up 37.2 per cent in the January-February period at $11.5bn.

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Average prices lift at a slower pace in February, foreign investment rises.

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China's foreign direct investment up 10.4%

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Foreign direct investment (FDI) into China has increased 10.4 per cent year on year in the first two months of 2014, the government says, while the country's outbound investment has slumped.

FDI, which excludes investment in financial sectors, totalled $US19.31 billion ($A21.32 billion) cumulatively in January and February, the commerce ministry said in a statement on Tuesday.

Foreign investors "remained confident in investment in China", ministry spokesman Shen Danyang told reporters, but acknowledged that "international investment remained low and there were various development problems within the country".

He did not give specifics, but a string of data has indicated a slowdown in the world's No.2 economy.

Separately, Chinese overseas investment in the two months fell 37.2 per cent year-on-year to $US11.54 billion, the ministry said, with investment to Hong Kong and the European Union leading the decline.

But Shen said that a high comparison base in the same period last year was behind the fall, mainly due to the close of China National Offshore Oil Corp's $US15-billion takeover of Canada's Nexen.

"Therefore, overseas investment in the first two months last year spiked, which ... made this year's year-on-year comparison base very high," he said.

The January-February figure would have marked a 33.6 per cent increase if the Nexen deal was excluded from the comparative data, he added.

By far the greatest proportion of investment in China comes from a group of 10 Asian countries and regions including Hong Kong, Taiwan, Japan, Thailand and Singapore.

FDI from those economies rose 11.6 per cent to $US16.94 billion, the ministry said. US investors piled $US711 million into the country during the period, up 43.3 per cent.

"Investment from the 10 Asian countries and the US maintained relatively fast growth," the ministry said.

Investment from South Korea soared 224 per cent to $US834 million, the ministry said, but did not give an explanation for the leap.

Investment from the European Union declined 13.8 per cent to $US1.05 billion.

Of China's outbound investment, 65.4 per cent of the total, or $US7.55 billion, went to Hong Kong, the Association of Southeast Asian Nations (ASEAN), the EU, Australia, the US, Russia and Japan.

But the amount being invested in Hong Kong, the EU and ASEAN declined 62.9 per cent, 11.6 per cent and 2.2 per cent, respectively.

The Hong Kong decline was also related to the Nexen deal as part of the takeover funds went through the financial hub, Shen said.

Investment in the US jumped 45.6 per cent, while that to Australia gained 31 per cent. Investment to Russia and Japan "at least doubled", the ministry said, without providing amounts or specific percentage changes.

China's total outstanding overseas investment as of the end of last month stood at US$537.2 billion, the ministry said.

Foreign investment into China rebounded in 2013 to $US117.59 billion as confidence in the country's growth potential picked up.

It had declined the year before. Investment by China overseas also rose last year, hitting $US90.17 billion, and officials said it could overtake FDI this year.

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FDI into China has risen 10.4 per cent in the first two months of the year compared with the same period in 2013.

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The true potential of China-Australia ties

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Next month, Tony Abbott will put his personal stamp on the Australia-China relationship when he leads an unprecedented delegation of state premiers and senior business leaders to China.

As previous prime ministers -- Hawke, Keating, and Howard --  who managed the relationship well have shown, its importance and complexity is such that it requires Abbott's personal attention.

The task for Abbott and his advisers, however, is much harder than it previously has been. Today, China is vastly more important to Australia, is economically more powerful, and is internationally more assertive and confident.

Recent claims in Australia that the US is a more important economic partner than China are muddled as they confuse stocks of foreign direct investment with flows, effectively confusing the past with the present and the future. This makes no sense when the comparison is with a country that accounts for over a third of Australian exports; is the biggest source of foreign fee-paying students; and is the second most important source of tourist income.

Abbott would know that China’s economy today is almost twice the size it was when he visited as health minister in 2007. If, as is expected, his visit includes the south-western city of Chengdu, the capital of Sichuan with a population of some 95 million, he will see a city utterly transformed over the past seven years.

Apart from the former health minister’s jogging track alongside the Jinjiang River that runs through central Chengdu, little else remains from those years. He’ll arrive at a massive new airport terminal; police escorts will need to clear the roads of more than twice as many cars; he will speed along broad freeways sweeping under multi-storied, clover-leaf overpasses. From striking glass towers, he will gaze across miles of new construction, towering cranes, green parklands, and buzzing industrial zones.

Chengdu now houses the Chinese headquarters of many Fortune 500 companies, recently hosting a Fortune 500 global conference. After years of prevarication, Australia has now belatedly joined some 20 other countries with consulates in Chengdu.

On this trip, China’s leaders will want to understand how Australia views the relationship, how committed the Australian Government is to maintaining close and stable relations, and whether the Australian Prime Minister has a thought-out vision of future relations.

For Australia’s part, the Prime Minister will want to understand the stability and growth prospects of the Chinese economy; the extent to which the new leadership has consolidated its grip on power; and, most important of all, China’s intentions towards its neighbours (especially Japan) and towards the US.

When dealing with China, head-of-government meetings are treated with the utmost seriousness. For the Chinese side, they offer both the opportunity to explain (and justify) policy settings, and the political and social systems, and hopefully attract a sympathetic hearing. 

They also use these meetings forthrightly to explain the Government’s position on issues of some sensitivity both within and without China -- especially Tibet and Xinjiang. Taiwan is far less sensitive than it once was. Human rights standards are expected by the Chinese to be raised and their responses are well rehearsed.

Beyond these matters, over which the Chinese leadership knows big differences often exist with foreign visitors, they will look towards giving the relationship strategic direction, involving bilateral trade and investment deals and other forms of cooperation.

Following the recent National People’s Congress, energy, environmental research, and technology are likely to near the top of China’s list of areas for cooperation with Australia.

For the Australian side, the Prime Minister will no doubt wish to point to differences in values and the central role the US alliance plays in Australia’s security. Abbott will seek the early conclusion of bilateral free-trade agreement negotiations, the ramping up of bilateral military cooperation, possibly live-cattle exports from Australia, and how Australian financial sector services firms can participate more fully in the sectors’ opening up under recent reform policies. 

Abbott will also be at pains to reiterate that Chinese foreign investment is warmly welcomed in Australia, notwithstanding some restrictions on investment in agriculture and potentially residential real estate in the future.

A strong base of substantive issues exists for the visit to be constructive and productive. The Chinese side will go out their way to make it a success.

There is no reason why it cannot also be warm and forward-looking, but this will depend in on the chemistry of the leaders and how well-prepared we are and what ideas we bring to the table.  

In terms of atmosphere, the Prime Minister will need to be measured in how he discusses the differences between us. It is important to recognise the Chinese leadership knows this litany very well.

Nothing he will say will be new to them, but how it is said will be closely scrutinised. If we are seen to be giving excessive weight to differences and putting relatively less on areas of constructive cooperation and vision for the relationship, goodwill and warmth on the Chinese side will dissipate quickly. That will make it harder to move on the Prime Minister’s other priorities.

The early missteps in managing the relationship by the new Australian Government have been noted with considerable displeasure in Beijing. These were the unfortunate gaffes that Japan was our “best friend in the region” ( the usual formula is “we have no better friend”); continuing the previous government’s blanket exclusion of Huawei’s participation in the NBN when a review was foreshadowed by some ministers; and the unnecessarily high-profile, media-driven account of representations made to the Chinese Ambassador over China’s declaration without consultation of an Air Defence Identification Zone in the East China Sea.

Each of these, however, is really a problem with style and presentation born from inexperience, rather than substance. Huawei doesn’t need the NBN business, for instance, though it no doubt would like it. But a blanket ban makes everyone on the Chinese side lose face and stokes feelings of resentment towards Australia.

In recent years, prime ministerial visits to China have tended to be defensive in tone. There is no need for that.

Australia should be confident in its approach.  China welcomes a close and constructive relationship with Australia. The successful prime ministerial visits have been when prime ministers have had big, forward-looking agendas. Take Bob Hawke in the ‘80s, when the Channar iron ore project began the era of strategic cooperation in iron and steel sectors; Keating engaging China in the APEC leaders’ meetings; or Howard with North West Shelf Australia LNG project. When dealing with China, these big initiatives could only be done at the prime ministerial level.

The Prime Minister’s objective of concluding the FTA this year is worthy, but our sights could be much higher. Great scope exists for China to work with Australian firms in easing infrastructure constraints on resource exports, such as in the Bowen and Surat Queensland coal basins or the iron ore, copper, and other resource mines in the interior of Port Augusta and other regions of South Australia. China would also be interested in helping to consolidate and increase the efficiency of parts of Australia’s agricultural sector, such as dairy.

The potential agenda for Australia-China cooperation is vast, limited more by our imagination than by economic constraints. To tap into this potential, however, high-level understanding and trust between the leaders on both sides and between our business and wider communities more generally is required.

To this end, Abbott’s public and private support for the China-Australia Senior Business Leaders’ Forum is significant. At the leaders’ level, however, it is vital to move beyond seeing the relationship in purely transactional terms. Leaders must find ways using cultural exchanges, education and scientific engagement, and cooperation regionally and globally to lay a really solid ground of respect and trust. Only then might we witness the true potential of what a strong China-Australia relationship could bring.

Dr Geoff Raby is chairman and CEO of Beijing-based advisory firm Geoff Raby & Associates, and a former Australian ambassador to China. He is vice chairman of Macquarie Group China and a Vice Chancellor's Professorial Fellow at Monash University.

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Concluding the free-trade agreement between China and Australia this year is a worthy goal, but Tony Abbott should set his sights even higher by adopting a big, forward-looking agenda.

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A nasty Chinese flu could hurt Australia

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The biggest story for Australia is not the Ukraine but the China credit crunch and how far the Chinese authorities will take it.

The collapse of the Zhejiang Xingrun real estate group shows that after stopping a number of past minor attacks on the Chinese shadow banking system when the implications were understood, this time around China is more serious.

I do not pretend to have inside knowledge of how far China will go, but if they keep up the pressure, I think the repercussions will be severe both for China and Australia. For Australia the effects start with the sharemarket and taxation revenue but goes all the way to the prices of residential dwellings in the China belts of Sydney and Melbourne.

The old story that if China catches a cold we get pneumonia applies more to 2014 than any past year. 

The first blow to Australia from the China credit crunch has been the price of iron ore, where traders in the December quarter stockpiled ore as a way to gain funding for steel mills. That boosted the iron ore price but the subsequent fall not only affects our major miners BHP, Rio Tinto and Fortescue, but also Australian taxation revenue.

Chinese banks have cut lending by as much as 20 per cent to sectors of the economy plagued by excess capacity. Steel is close to the top of the list. At the weekend a Shanxi steel mill went bankrupt and in response, banks are believed to have further restricted credit lines to some mills so more bankruptcies are possible, although the better steel mills can still get credit.

Iron ore trading has a big influence on the short-term price. Stocks at the ports are still very high and some of the traders, facing heavy losses, are trying to hold onto their cargo until the market recovers.

The most widely held view among the traders is that the iron ore price will fall further given the supply available but will not fall below $95.

What is far more important than the traders’ situation is the overall demand and supply forces and the steel industry view is that in the April-June quarter there will be a pick-up in demand and high cost iron ore mining may be reduced.

And that’s where we get to the second part of the credit crunch -- property. The Chinese economy gains enormous impetus from the rezoning and development of land. Vast numbers of apartments remain empty because they are too costly to buy, but banks are happy to fund them because prices keep rising. In Australia we know that the only way to stop such situations is a nasty credit crunch where lots of people go broke. But this is very painful and so far the Chinese have not had the appetite to do it. There are many who believe that we are headed to a dangerous situation in the shadow China banking system (The hidden crisis behind copper and iron price collapses, March 11).

Certainly if the Zhejiang Xingrun collapse is allowed to lead to more failures then watch out -- it will affect demand for both steel and copper because confidence will be hit hard.

But it may also affect the ability of the Chinese to ship money into the Australian residential property market. For what it is worth my guess is that the Chinese will ease the credit crunch when the water starts to get hot.

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Between iron ore price falls and the flow-ons from a potentially dangerous Chinese shadow banking situation, the saying that ‘if China catches a cold we get pneumonia’ applies more to 2014 than any year so far.

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China tells firms to start reporting carbon emissions

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Thousands of companies across China must start reporting their greenhouse gas emissions under a government plan to build a nationwide emissions database ahead of launching a national carbon market.

The National Development and Reform Commission (NDRC), China's top economic planning agency, said in a note on its website that all companies that emitted more than 13,000 tonnes of carbon dioxide equivalent (CO2e) in 2010 must report their future annual emissions of all six major greenhouse gases.

"The reporting is to tighten the control over major emitters, provide statistics for capping greenhouse gas emissions and launch a carbon trading scheme," the note said.

The lack of credible emissions data is among the key challenges in building a national market, because imposing facility-level carbon caps is difficult if no one knows how much each power plant or factory emits.

It did not specify when mandatory reporting would begin, but analysts told Reuters they expected the rule to enter into force from 2015.

China is the world's biggest emitter of greenhouse gases, blamed by scientists for causing global warming, but has pledged to cut emissions per unit of GDP by 40-45 per cent by 2020, compared with 2005 levels.

Carbon trading is Beijing's main policy to cut emissions. It is launching pilot carbon markets in seven cities and provinces to prepare for the launch of a national market later in the decade, expected some time between 2017 and 2020.

Experts said a nationwide emissions database would also be useful in evaluating other policies, such as a potential tax on carbon emissions.

"Knowing the potential and cost for companies to mitigate would help to evaluate the effects," Song Ranping at the World Resources Institute in Beijing told Reuters.

The NDRC did not specify a plan for how and when appropriate monitoring equipment would be installed across the many thousands of facilities in China covered by the new rule.

Some experts said installing equipment and verifying the data could be major challenges for many, especially in the nation's underdeveloped western region.

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Reporting to tighten the control over major emitters amid lack of credible data.

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Probe into foreign investment in property underway

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Federal Parliament's House Economics Committee has released the terms of reference for its inquiry into foreign investment in real estate.

The parliamentary inquiry was formed after Coalition MPs raised concerns that young families are being priced out of the home buying market.

Despite a recent increase in community concern over a rise in Chinese property investment, the chair of the committee, Victorian MP Kelly O'Dwyer said the inquiry is not focused on investors from any particular country.

A report released earlier this month by Credit Suisse estimated that Chinese buyers are expected to purchase $44 billion worth of Australian residential property over the next seven years.

The committee will look at the economic benefits of foreign investment in residential property and whether it is is actually increasing the supply of new housing and bringing benefits to the local building industry and its suppliers.

It will also look at how Australia's foreign investment regime compares internationally as well as determine whether the policy framework can be enhanced.

The committee is calling for submissions, which must be received by Friday May 9.

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Inquiry formed following rising concern that locals are being priced out of the market by foreign investment.

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Push for yuan to join kiwi currency basket

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The Reserve Bank of New Zealand's currency basket used to measure the broader value of the New Zealand dollar should include the Chinese yuan, given China is now the nation's biggest market and the two currencies can be directly traded, economists say.

The Reserve Bank calculates the trade-weighted index (TWI) by measuring the value of the New Zealand dollar against the US dollar, euro, Japanese yen, Australian dollar and British pound, the currencies of some major trading partners.

Economists say this week's agreement to allow the kiwi to trade directly with the yuan shows how outdated the TWI has become as it no longer represents the majority of New Zealand's trade.

The currency agreement, cemented during Prime Minister John Key's visit to China, reflects the rising importance of Asia's largest economy to New Zealand trade and the Asian nation's desire to raise the global usage of its currency.

"The direct convertibility is a further signal that we need to start thinking about incorporating where New Zealand is actually trading rather than the historical mix of our trading relationships," said Shamubeel Eaqub, principal economist at the New Zealand Institute of Economic Research.

"The TWI that is commonly quoted is still quite backward looking and it has still got very large weights on things like the British pound."

Only three per cent of New Zealand's exports went to the UK in the year ended January 31, while about 22 per cent went to China.

"We have to be open to the idea of incorporating the new trade pattern," Mr Eaqub said.

"Steadfastly refusing to add the yuan, which is our top trading partner now, is no longer defensible."

That view is echoed in a currency research paper published on Thursday by the Bank of New Zealand, which noted how outdated the TWI has become.

The Reserve Bank reviews the weights in the TWI annually in December and hasn't yet made a decision about incorporating the yuan when making its calculations, a spokeswoman said.

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Economists say the NZ Reserve Bank's trade-weighted index for the local currency should now include the Chinese yuan.

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China's MMG in talks to acquire Las Bambas

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MMG, the overseas arm of Chinese state-owned Minmetals, has confirmed it's in talks with mining giant Glencore Xstrata to buy its Las Bambas copper mine project in Peru.

But Australia-based MMG admits there is no guarantee a deal will be agreed.

The company is part of a consortium bidding for the project which includes Hong Kong-registered Guoxin International Investment Corporation and China's CITIC Metal.

If successful, it is estimated the acquisition would cost more than $US5 billion ($A5.54 billion) and would be China's biggest mine deal, according to media reports.

In a statement to the Hong Kong Stock Exchange, MMG said discussions were taking place with Glencore International AG -- a subsidiary of Glencore Xstrata -- about the acquisition of the mine.

"No binding agreement has been reached in connection with the acquisition. There is no assurance that a binding agreement will be reached by MMG in connection with the acquisition or the acquisition will materialise," the statement added.

Swiss commodities trader Glencore secured Chinese backing for its May 2013 merger with mining giant Xstrata by agreeing to sell its interest in the Las Bambas copper mine project by the end of this September.

Chinese approval for the merger was the last one needed after the European Commission and South Afrian competition authorities gave the deal the green light.

The Las Bambas copper mines are not yet operational but it is estimated they will produce more than 400,000 tonnes of copper a year.

China is the world's biggest importer of the metal.

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MMG confirms it is in talks to buy Glencore Xstrata's Las Bambas copper mine.

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澳洲 TOP 3 商业新闻

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【澳财政部长助理遭廉政公署调查】澳大利亚财政部长助理Arthur Sinodinos日前遭新南威尔士州廉政公署调查。因其被怀疑为一家基础设施集团赢得与悉尼水务局的合约,从而获取2000万澳元(合人民币1.2亿元)的好处。廉署调查预计将持续三周。

【政府取消“百人规定”】阿尔伯特政府对此政策的修改意味着占企业股份总和不及5%的少数股东将不再有权召开临时股东大会。根据澳洲公司法现行规定,一家企业超过100人以上的在册股东可以强制要求召开临时股东大会,(即“百人规定”),而因此带来的监管成本可能在50-100万澳元之间。

【澳元兑美元汇率已升至三个月以来最高位】本周三早,澳元兑美元汇率达到去年12月以来的峰值100:91.38。这得益于俄罗斯和西方国家之间日趋放松的紧张关系和稳定的当地利率前景。OM Financial高级客户顾问Stuart Ive曾在周三表示预计澳元兑美元汇率在90.90到91.50之间。

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这是今天商业观察网站上最重要的三条财经新闻.

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Protesters occupy Taiwan's parliament

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Protesters have barricaded themselves inside Taiwan's parliament for a third straight day, threatening "further action" if the government pushes ahead with its plans to ratify a contentious trade pact with China.

More than 200 protesters - mostly young students - stormed through security barriers and took over the parliament's main chamber late on Tuesday in the first such occupation of the building in Taiwan's history.

READ: Is Taiwan the next Crimea?

Hundreds of police officers attempted to barge their way in on Wednesday and end the occupation, but they failed to breach the improvised barricades fashioned by the students out of piles of armchairs.

As the stand-off entered a third day on Thursday, student leader Chen Wei-ting said the protesters would lead to "further action" unless President Ma Ying-jeou responds to their demands by Friday.

"We demand that the service trade pact - and any other agreements or negotiations with China - be halted until a bill is passed to scrutinise such deals," Chen told the protesters, whose antics have been broadcast around the clock by Taiwanese TV networks.

"We ask President Ma Ying-jeou to respond to our demands by noon Friday or we will take further action," Chen added, as the crowd chanted "return the service trade pact, defend democracy".

The president's office declined to comment on the demands, saying only that it supports the parliament's efforts to "properly handle the situation in accordance with the law".

The protesters have vowed to occupy the parliament until Friday, when MPs are set to hold a full session to review the pact.

Signed in July, the agreement is designed to further open up trade in services between China and Taiwan, which split 65 years ago after a civil war.

The protesters say the deal will damage Taiwan's economy and leave it vulnerable to political pressure from China.

Taipei's police force has deployed some 2000 officers to the parliament, who are guarding it in shifts as around a thousand more protesters remain in its grounds.

Police said 38 officers received mild injuries attempting to force their way back into the chamber on Wednesday.

Parliament speaker Wang Jin-pyng on Thursday pledged to resolve the situation with "appropriate methods".

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Students opposed to the ratification of a trade pact with China are occupying parliament for the third day.

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China Mobile net profit down 6%

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China Mobile, the world's biggest mobile operator by subscribers, says its 2013 net profit fell almost six per cent, its first decline for more than a decade.

Net profit was 121.7 billion yuan ($A21.66 billion), down 5.9 per cent compared to 2012 and the first full-year fall since 1999, it said in a statement to the Hong Kong stock exchange where it is listed.

The group described 2013 as a "crucial year of transformation", which included the issuance of 4G network licences and a more saturated traditional communications market with fiercer competition.

China Mobile was granted the licence to operate the faster next-generation 4G data network in China in December last year, and had planned to invest almost $US7 billion in building the network.

The firm, which started selling Apple iPhones for the first time in January this year, has said it targets 50 million 4G users in 2014.

It had enhanced its networking capabilities in the face of "fiercer" competition from its competitors China Unicom and China Telecom, the statement said.

Revenue rose by 8.3 per cent year-on-year to 630.18 billion yuan and it also saw its total customers increase by eight per cent to 767 million.

China Mobile's 3G services market share increased "steadily" with a net growth of 104 million customers. Revenue from wireless data traffic contributed 18.3 per cent of its telecommunications services revenue, the statement said.

However, its results fell short of the full-year net profit increases seen by its competitors China Unicom and China Telecom.

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The world's biggest mobile operator 2013 net profit fell by six per cent, its first decline in over 10 years.

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PetroChina annual profit rises 12.4%

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PetroChina, China's biggest oil producer, says its profit rose 12.4 per cent last year after higher retail petrol prices helped to narrow heavy losses for its refining unit.

PetroChina said on Thursday that earnings rose to 129.6 billion yuan ($A23.95 billion). Total revenue rose 2.9 per cent to 2.2 trillion yuan.

A change in state-set retail petrol prices in 2013 helped to narrow state-owned PetroChina's loss on refining operations by nearly 45 per cent to 24.4 billion yuan.

China's government squeezes refining margins at its major oil companies and sometimes forces them into a loss by holding down prices at the pump when global crude costs spike up.

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China's biggest oil producer profits rise 12.4 per cent last year after higher retail petrol prices helped to narrow heavy losses for its refining unit.

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Does China over invest and under spend?

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Graph for Does China over invest and under spend?

One of the fundamental truisms in analysis of the Chinese economy is that the country invests too much and consumes too little. This line has been repeated so many times that it has become axiomatic.

It is the official verdict of the International Monetary Fund, which estimates the level of over-investment in China is equal to about 10 per cent of GDP and possibly as high as 20 per cent. Paul Krugman, a celebrated Nobel economics prize winner, certainly thinks that is the case. China’s household consumption is only 35 per cent, or about half the level in the United States.

In a way, Beijing has more or less accepted this line of argument. When Wen Jiabao delivered his final speech as the premier, he famously said the domestic economy was “unbalanced, uncoordinated and unsustainable.” 

The ambitious reform program launched last year aims to address the structural imbalance in China’s economy. However, there are some serious analysts who are starting to question some aspects of the orthodoxy and are worried about the impact of the prevailing assumption on the future development of China’s economy.

Cai Hongbin, dean of Guanghua School of Management at Peking University, the country’s most prestigious educational institute and a former economics professor in the United States, argues the rampant assumption that China over-invests and under consumes is flawed.

He explains that the differences in statistical calculation and methodology between China and other countries contribute to the underestimation of Chinese consumer spending and overestimation of investment.

He believes that China’s consumer spending has been under-reported by as much as 10 per cent of GDP and overlapping and repetitive calculations are responsible for about overestimating investment by as much as 10 per cent of GDP.   

If that is indeed the case, China’s imbalanced economy starts to look a lot better. For example, household consumption as a share of GDP stands at 50 per cent last year and the average for developed economies is about 80 per cent. If you add 10 per cent to that, the gap looks a lot more reasonable.

Chinese investment as a share of GDP is about 47 per cent and the average for the developed world is 20 per cent. Again, if Cai’s estimate is correct, China’s investment level is more aligned with the historical peaks in Japan and Korea.

The single biggest factor contributing to the underestimation of Chinese household consumption is the cost of housing and he thinks it has been “seriously underestimated” at a conference after the recent annual gathering of the Chinese parliament.

The cost of housing accounts for 20 per cent of the US household spending and 14 per cent of GDP. In comparison, housing only accounts for 8 per cent of Chinese spending or 3 per cent of the GDP, according to the official statistics.

Hold on, that can’t possibly be right. Housing is arguably the single most expensive item in Chinese family budget. The cost of apartments and rents are going through roofs, especially in mega-cities like Beijing, Shanghai and Guangzhou. Cai explains the way Chinese statisticians calculate household spending is based on historical prices, which are much cheaper than current market prices, which have risen rapidly in recent years.

As a result, he argues that if China uses the accepted international standard to calculate the true cost of housing consumption in China then household consumption as a percentage of GDP could increase by at least 5 per cent.

The existence of a large and flourishing informal economy in China also contributes to under-reporting of consumption. For example, millions of nannies in Chinese cities have never been included in the official statistics, Cai told Caixin media, a leading Chinese financial publication.

One of the most interesting points he suggests is government spending, which is under the spotlight in China due to rampant corruption. Government spending on cars, hospitality and overseas trips is currently classified as operational costs and not as consumption.

This is a significant point and also a very sensitive one. There are various estimates that put official spending in these three areas at 900 billion yuan or about one third of the total government expenditure.

A deputy head of Hubei’s statistics bureau told the state media that the government spent a staggering 400 billion yuan a year on government cars. No wonder German auto-makers love China and there are so many black Audis on the streets.

On the investment side, China’s local statistics bureaus often exaggerate as well as double account on many projects. For example, if you tally all provincial GDPs in 2013, they exceeded the national total by more than 6 trillion yuan. Underestimation of depreciation and other factors also lead to over-calculation of investment.

Cai, who sits on the boards of China Unicom and Sinopec, two of China’s largest companies, warns that the skewed understanding of the true state of consumption and investment could lead to serious consequences.

For example, he says artificial stimulation of consumer spending could be more dangerous than investment -- and bear in mind that the 1997 Asian financial crisis and the global financial meltdown of 2008 happened as a result of reckless consumer spending.

The simple prescription of ‘spend more and invest less’ will not re-balance China’s economy, he argues. The key is to not to invest less but focus more on the quality of investment and to invest in things that would enhance the country’s overall productivity, like technology and education. 

China needs to improve the efficiency of its investment and foster better growth through deepening institutional reform. Cai’s insight will add much to the current prevailing received wisdom on China -- and we should pay a bit more attention to analysts from China, rather than relying on doomsayers all the time.

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Evidence is growing that China's reported consumer spending and investment figures are well out of whack with reality, and plans to stimulate consumption could do harm.

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Michelle Obama in China for week-long tour

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America's first lady Michelle Obama has arrived in Beijing, kicking off a week-long tour which US officials say is focused deliberately on soft issues, in a bid to dispel growing mistrust between the United States and China.

Accompanied on Thursday by her daughters and mother, Obama's visit will take her to some of China's most celebrated sites, including the Great Wall, the ancient terracotta warrior sculptures of Xi'an and a panda reserve.

White House officials have said that Michelle Obama would not take up the myriad disputes between the two nations, but would instead speak about educational exchanges and emphasise US goodwill towards the Chinese people.

The Chinese public's opinion of the United States has significantly worsened from highs when President Barack Obama took office in 2009.

Forty per cent of Chinese had a favourable opinion of the United States in last year's Pew Research Center survey, a figure far below that in Western and African nations, but still higher than the rate in most of the Islamic world.

The world's two largest economies have been increasingly at odds over issues that include allegations of mass Chinese cyber-espionage and Beijing's increasing assertiveness in territorial disputes with US allies Japan and the Philippines.

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US first lady has arrived in China for a week-long visit with her mother and daughters.

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HSBC flash China PMI slips in March

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Activity in China's manufacturing sector remained weak in March, according to a preliminary survey.

The HSBC China flash purchasing managers' index printed at 48.1 in March, an eight-month low, down from 48.5 in February.

The reading was lower than forecast, as economists surveyed by Bloomberg tipped a print of 48.7.

The flash index is published ahead of final PMI data and is usually based on 85 per cent to 90 per cent of total survey responses each month.

HSBC chief economist for China Hongbin Qu said the read suggests China's growth momentum continued to slow in March.

"Weakness is broadly based, with domestic demand softening further," Mr Qu said.

"We expect Beijing to launch a series of policy measures to stabilise growth.

"Likely options include lowering entry barriers for private investment, targeted spending on subways, air-cleaning and public housing, and guiding lending rates lower."

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Activity in manufacturing sector remains weak, preliminary survey shows.

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澳洲 TOP 3 商业新闻

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【德勤“神奇五行业”支撑澳蓬勃发展】四大会计事务所之一德勤的最新研究确定了25个热门行业,这些行业决定了澳大利亚未来20年的发展趋势。目前约占澳经济10%的采矿业,很有可能被德勤的报告中的五大发展领域(天然气、农业企业、旅游业、国际教育和财富管理)所超越。

【澳税务局整顿红利抵免行为】日前,澳大利亚税务局致函大批基金经理、股票经纪人和大型投资者,敦促他们在4月24日前规范使用红利抵免。(编者注:红利抵免是指企业分发红利时已经支付了的企业利润所得税,从而大幅降低了投资者所获红利要支付的税款。)

【澳工会老板将退出】澳大利亚工人协会老板保罗·豪斯(Paul Howes)将退出工会活动,并将在企业领域寻找工作。工会秘书将会在今天发出声明,Howes很可能是对劳工活动不愿意走向现代化而心灰意冷才离开这个他工作过六年的岗位。

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这是今天商业观察网站上最重要的三条财经新闻.

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Huawei condemns NSA spying

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Chinese telecoms and internet giant Huawei has condemned the US National Security Agency after reports revealed it had been secretly tapping the company's networks for years.

The New York Times and Germany's Der Spiegel said on Saturday that the NSA had accessed Huawei's email archive, communications between top company officials, and even the secret source code of some of its products.

The reports were based on documents provided by fugitive NSA contractor Edward Snowden.

"If the actions in the report are true, Huawei condemns such activities that invaded and infiltrated into our internal corporate network and monitored our communications," Roland Sladek, Huawei's vice president for international affairs, said in a statement on Monday.

He added that Huawei "disagrees with all activities that threaten the security of networks and is willing to work with all governments, industry stakeholders and customers, in an open and transparent manner, to jointly address the global challenge of network security".

The original intent of the NSA's Operation "Shotgiant" was to search for links between the Shenzhen-based tech giant and the Chinese military, according to a 2010 document cited by the Times.

But the program's goal eventually grew to include the penetration of Huawei communications products sold to third countries in order to "gain access to networks of interest" across the globe, the paper said.

The New York Times website is blocked in China and the report could not be accessed on the Chinese internet.

Washington has long seen Huawei as a security threat due to perceived close links to the Chinese government, which the company denies, and both the United States and Australia have barred it from involvement in broadband projects over espionage fears.

The NSA defended its intelligence-gathering operations, which it maintained were focused only on "valid foreign intelligence targets".

In a statement, the NSA did not cite the New York Times or Der Spiegel by name but criticised the "continuous and selective" publication of details on its surveillance methods, arguing that such reports endanger US national security.

It insisted that NSA activities "are focused and specifically deployed against - and only against - valid foreign intelligence targets in response to intelligence requirements".

It also pushed back against suggestions by Snowden and others that spy agencies were waging an industrial espionage campaign on behalf of US businesses.

"We do not use foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of - or give intelligence we collect to - US companies" to enhance their competitiveness, the NSA said.

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Chinese telco giant condemns US National Security Agency after reports revealed it had been secretly tapping the company's networks for years.

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