A new report from KPMG has revealed a 36.3% reduction in Chinese investments in Australia, from $13 billion in 2017 to $8.2 billion in 2018.
The report was produced by KPMG and The University of Sydney Business School looking at a dataset covering investments into Australia made by entities from the People's Republic of China through mergers and acquisitions, joint ventures and greenfield projects.
The report considered real estate investments excluding residential apartment and private home sales.
According to the report, much of this decline in China's outbound direct investment in Australia reflects the impact of policy changes in China.
The rate of decline has accelerated since 2017 and is closer to the trend observed in the US and Canada, which have experienced 83% and 47% drops in Chinese investment respectively.
The report also reveals private companies account for 87% of deal value and over 92% of deal volume and there was an overall trend towards smaller deals.
Only 8% of deal volume and 13% of deal value was accounted for by state-owned enterprise investment in Australia.
Healthcare appears to be the most popular Australian sector for Chinese investors, attracting 42% of total investment in 2018.
Commercial real estate and mining investment both dropped in the last year.
Chinese executives broadly still see Australia as an attractive country to invest with improving political climate, the report shows.
The survey actually found a slight increase in Chinese investors' sense of feeling welcome to invest.
However, the survey did confirm it is more difficult to get capital out of China and there are challenges in raising capital in Australia - these factors lead Chinese investors to have a deteriorating outlook for revenue and profit growth in 2019.