Chinese agricultural needs could be great for rural property owners
The latest report by KPMG and the University of Sydney's Chinese Studies Centre has provided an in-depth analysis of China's large scale investment in Australia's agricultural and agribusiness sectors.
Titled 'Demystifying Chinese Investment in Australian Agribusiness', the report outlines the various needs of China's growing middle class in relation to Australian agriculture, and highlights the type of investment opportunities available to rural property owners.
According to the results, Chinese investors own less than 1 per cent of Australian farmland, but with the increasing desire for premium safe foods, this presents massive opportunities for Australian rural real estate owners heading into the future.
As the middle class in China grows, the need for safe foods means the expansion of trade into other countries. The report highlights Australia's competitive advantage for supplying "premium products such as meat, dairy, wine and vegetables", which are of great interest to Chinese importers.
In terms of demographic, China is home to 21 per cent of the world's population, with issues emerging as land and water problems begin to make providing for this mass of people a difficult task to undertake.
Furthermore, rapid urbanisation has played a role, with more people becoming focused into metropolitan centres - increasing their need for fresh, healthy and reliable foods.
Since China joined the World Trade Organisation in 2001, the nation experienced an increase in agricultural trade, growing from $27.9 billion USD to a huge $155.7 billion USD. This has also resulted in an annual increase of 17 per cent, which Australia has been able to benefit from directly.
If you own rural real estate and are involved in the production of food goods, this could be exciting news. As detailed in the report, the Australian agricultural business need investors to aid the "primary production and integrated food processing industries" to help realise their economic potential.
The report also indicates that while governmental policy will aid the integration of Chinese and Australian trade, much of the change will come from the grassroots.
The agricultural industry and broader rural community will have to take a "proactive and pragmatic view" when it comes to building strong relationships, in order to take full advantage Australia's role in the process.
If you're a farm owner or a property investor looking into purchasing rural real estate, now could be the perfect time to take advantage and establish yourself in the market before heading into the bright trading future ahead.