Summary
Chinese investment in Australia in recent years has mainly focused on healthcare, food and agriculture, and advanced technology, in which sectors Chinese outbound investment are expressly encouraged by the Chinese government as opposed to real estate and entertainment.
Following the launch of the ‘Healthy China 2030’ plan by President Xi Jinping in 2016, the Chinese government has promulgated a series of laws and policies aiming to greatly improve the Chinese healthcare system.
The introduction of Chinese policies to improve the healthcare system presents an opportunity for Australian companies to share their expertise and profitably participate in the industry’s transition and growth.
Australia has become a highly sought-after destination for Chinese healthcare investment precisely because of its leading technology, transferable management know-how, high-level care service experience and the ‘clean, green and healthy’ image of Australian products.
As the Chinese healthcare sector matures and the aged care industry develops, there will be greater need for the high-quality products and services and thus more demand for cooperation or investment in business providing them.
China-Australia healthcare investment overview
2015-2017
- The rapid growth of Chinese investment into the Australian healthcare sector started in 2015.
- In respect of market segments, health supplement and healthcare service delivery accounted for the majority of Chinese investment. While there was less major investment in pharmaceuticals, biotechnology or aged acre, these sectors are expected to attract significant Chinese investment in the future.
- High profile transactions included Biostime’s acquisition of Swisse Wellness, China Resources and Macquarie Capital’s investment in Genesis Care, Shanghai Pharmaceutical’s investment in Vitaco, CITIC Capital’s investment in Ansell, HengKang Medical’s acquisition of PRP, and Goldman Sachs’ investment in Icon.
2018
- Chinese investment into Australia’s healthcare continues to soar.
- The Chinese investment into the Australian healthcare sector in 2018 totalled AUD 3.4 billion, representing an increase of 111% over 2017. Healthcare became the biggest sector receiving Chinese investment in 2018. Other active investment sectors were real estate, energy, food and agriculture, etc.
- Major transactions include CDH’s investment in Sirtex Medical, By-Health’s investment in Life-Space, and JIC’s investment in Nature’s Care.
2019
- The investment sector for 2019 was mainly the food and agriculture sector, as Mengniu’s acquisition of Bellamy’s accounted for nearly half of the total investment in 2019.
- Other active sectors mainly included real estate, services and mining. Interestingly, no investment was registered in the healthcare sector, but Chinese investors are still active in Australia’s healthcare.
In summary, Chinese investment into Australia’s healthcare totaled AUD 2.55 billion in 2015, AUD 1.35 billion in 2016, AUD 1.58 billion in 2017 and 3.44 billion in 2018.
Chinese investors are predominately privately-owned companies instead of state-owned companies, in terms of both deal value and deal volume. This trend is expected to continue in the future.
Chinese private equity funds have played a significant role in the recent China deals in the Australian M&A market, particularly in the healthcare sector.
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