A “leaping, jumping, flying game” was how Australian Prime Minister Malcolm Turnbull described the first professional game of Australian rules football to be played on Chinese soil.
Also at the launch ceremony in Shanghai this month was billionaire property tycoon Gui Guojie, a major influence in the plans to bring the Aussie sport to the Chinese market.
Back in Australia Gui has been ploughing his sponsorship dollars into Port Adelaide, the team that will debut in China next year. Club officials describe him as “captivated” by the sport.
But Port Adelaide’s number one fan is also rather keen on Australian beef, it seems, after news that Kidman & Co, the country’s largest cattle farm, wants to sell a majority stake to a Chinese consortium backed by Gui’s real estate firm Shanghai CRED. “This has nothing to do with that, this is separate,” Gui said of his sports interest.
Shanghai Pengxin, the other major shareholder in the bid, failed in an offer for the same property last year, which was kiboshed by Australian regulators (see WiC305). Other deals in the agribusiness sector have since gone through, including the sale of Tasmania’s largest dairy farm to Chinese owners (see WiC315), while Kidman’s suitors announced the latest Chinese offer is worth A$371 million ($281 million).
Gui’s financial support for Australia’s unique footballing code won’t do him any harm, of course. But the Kidman deal is far from done, with Australian Treasurer Scott Morrison putting the final decision on hold until after the federal elections at the beginning of July.
That seems to be an attempt to prevent the takeover from being caught in the crossfire of campaigning, although the delaying tactics won’t appease critics like Nick Xenophon. “This isn’t just selling the farm, it is selling Australia’s largest farm”, the senator fumed last week, insisting that the Kidman bid will be an “election battle line”.
Morrison has also instructed his officials to arrange an independent review of the tender and final sale. “I want to be absolutely confident when I finally consider this matter that Australians have had every opportunity to be participants in that process,” he explained.
His caution reflects the prickly sensitivities over Chinese investment in Australian agribusiness, where Canberra now demands an automatic review once an investment hits a cumulative A$15 million. (Trade agreements with countries like the US and New Zealand mean that their private sector firms don’t face similar scrutiny until their farmland investments exceed A$1 billion.)
The other reason that the Kidman sale has been making headlines is because it’s a monster of a property. As the largest leaseholder of pastoral land in Australia, its 17 cattle ranches stretch across 11 million hectares of Queensland, South Australia, the Northern Territories and Western Australia (or “nearly two Hainan Islands” as National Business Daily explained).
Kidman’s chairman insists that the Chinese owners will be “good custodians” of the Australian outback. Another key point is that the bidders have carved out the Anna Creek station from the deal because of its proximity to land used by the Australian military for weapons testing.
Objections to international ownership look tricky to sustain, however, as almost a third of Kidman’s current shareholders are foreign. And scaremongering that Australian meat will be lost to overseas markets also sounds fanciful – Kidman already exports most of the 15,000 tonnes of beef it produces every year.
Paul Bloxham, HSBC’s chief economist for Australia and New Zealand, outlined the bigger picture this week with a review of how Australian exports to China are less dependent on commodities like iron ore than in the past.
Describing the trend as a “shift from mining to wining and dining”, he highlights how indicators like increases in tourist numbers and surging student enrolments at Australian universities are increasingly important in signposting how the commercial relationship with China is entering a new phase.
Keeping track: It was a surprise when the Australian Treasurer Scott Morrison announced, mere hours after this article was published, that he had already made a “preliminary decision” that the Chinese bid for the biggest Australian pastoral leaseholders would be blocked.
Morrison says the sale isn’t in the national interest and that he is concerned that the sheer scale of Kidman’s portfolio (more than 1% of the country’s landmass) is putting it out of reach of a domestic buyer.
Kidman’s managing director Greg Campbell questioned the veto, pointing out that more than 130 Australian parties were given the chance to make an offer but that no final bids were received.
“A break up of the business to sell properties separately would result in significant reduction in Kidman’s value, reduced production of up to 3,000 tonnes of beef per annum, the loss of 50 jobs from the present structure, and lower tax revenue for the country,” he added.
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