SYDNEY -- Chinese investment in Australia decreased for the first time in four years last fiscal year and may drop even more as the government in Canberra tightens its guard against China's influence on key infrastructure.
Approved Chinese investment reached 38.8 billion Australian dollars ($29.1 billion) in the year ended June 2017, the Foreign Investment Review Board said Tuesday -- down 18% on the year.
The Asian economic giant was still the top source, accounting for a fifth of overall foreign investment in Australia. But its real estate investments fell by half, largely driving what the report called "a decline in the total number and value of approvals for Chinese applications."
Chinese overseas direct investment has taken a "dramatic fall" due to capital controls implemented by Beijing at the end of 2016, the FIRB said in the document.
But Australia's own steps to protect key infrastructure from foreign influence and curb housing price growth are also at play, as noted in the report.
The Australian government established in January 2017 the so-called Critical Infrastructure Centre to strengthen oversight of foreign investments that could result in sabotage or espionage in such areas as communications, electricity and ports.
The move was widely seen as a response to concern over Chinese influence. Similar considerations likely informed recent critical infrastructure security legislation.
Housing appreciation driven by foreign money has also alarmed Canberra. To curb rising home prices, the government announced last May a levy targeting foreign owners of residences left vacant for at least six months a year. It has also introduced a 50% cap on foreign ownership in new residential developments.
Australians are wary of Beijing's growing clout exercised through investments and political donations. In 2015, Chinese developer Landbridge Group secured a 99-year lease to operate a commercial port in Darwin, a strategically important site that hosts U.S. Marines, raising security concerns.
And last year, an opposition lawmaker who had made pro-Beijing comments on the South China Sea issue after receiving Chinese donations quit under fire.
Many Chinese apparently view Australia's response as anti-China. The Communist Party's Global Times argued in an editorial that Beijing should cool ties with Canberra in response to the latter's "arrogant attitudes" that "have become a virtual example of what it means to 'bite the hand that feeds.'"