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China hungry for agri investment

Brad ThompsonThe West Australian
Shanghai-based trade director Nathan Backhouse.
Camera IconShanghai-based trade director Nathan Backhouse. Credit: The West Australian

WA's top trade representative in China is being overwhelmed with inquiries about investment in agriculture in the wake of the recent free trade agreement between Canberra and Beijing.

Shanghai-based trade director Nathan Backhouse urged WA agribusinesses and farmers to think big to attract Chinese investors hungry to buy into supply chain infrastructure.

The WA Trade Office is holding a list of major investors looking for big-scale opportunities in cattle, sheep, dairy, irrigated agriculture and grain processing.

Mr Backhouse said interest in food production assets was at unprecedented levels as inquires about the mining sector waned.

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"We were handling about 10 mining inquiries to every one in agriculture," he said. "In the space of two years things have changed. Now we are handling 10 agriculture inquiries to every one in mining.

"Part of the reason is that the Chinese believe that the demand for agricultural products is more sustainable than the long-term demand for mining commodities.

"We have been through a period of exponential growth in hard commodities that WA benefited from and now we are entering into that sort of period for soft commodities.

"Add issues of food quality where people want to make sure they are eating good quality, green, clean food and suddenly there is a massive niche market WA can benefit from."

The WA Government credits Mr Backhouse with steering Shanghai Zhongfu to invest in a major expansion of the Ord River irrigation scheme after it approached the trade office about opportunities in mining.

He also helped broker memorandums of understanding between the Government, Chinese provinces and businesses aimed at opening up the live cattle trade.

Mr Backhouse, who previously worked for the Department of Foreign Affairs and Trade in China, said the MOU between WA and the China Development Bank, existing trade ties and regular visits by ministers put it in a strong position to benefit for the FTA announced in November.

"The WA Government is well and truly in this space," he said.

"That is a key factor because the Chinese want to work with government, they are used to the government sector and in some cases they are still a little distrustful of the private sector.

"If we can put together projects of scale in beef, sheep, dairy and grains we have the investors ready to grow WA supply chains. Their belief is that they have capacity to assist in development of infrastructure, including rail, water-for-food projects, livestock processing and flour mills."

Mr Backhouse said a recent deal where China will build a railway in Thailand and purchase agricultural goods showed Beijing's desire to strengthen supply chains.

Things have changed. Now we are handling 10 agriculture inquiries to every one in mining." Nathan Backhouse

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