Chinese businessmen help Australia revitalize wool industry and want to eliminate concerns about agricultural transactions
American media said that in the central Australian state of Victoria, when the biting cold wind blew through the 170-year-old Larral sheep farm, a Chinese wool industry tycoon would work hard to help revitalize Australia’s wool industry. He also hopes to revolutionize Australians’ skepticism towards foreign investors.
An article titled “Concerning wool, China may be able to teach Australia some experience” published on the website of the American “Chicago Tribune” on May 29 stated that in 2014, Wen Qingnan (sound) acquired Lalal Shepherd field. Now he plans to build a shelter for newborn lambs in an unused hay shed to increase their survival rate by 40 percent. He also expanded the size of his flock. Such measures may help the world’s largest wool exporter restore profitability in wool production. Over the past 20 years, sheep farmers have been hit by cheaper alternatives to wool, and wool production has shrunk.
The article stated that not everyone welcomes foreign investment. Australia is one of the world’s major exporters, exporting almost all agricultural and livestock products from beef to wheat. A surge in Chinese investment in Australian agriculture has Australians increasingly concerned they could lose control of precious agricultural land. The subject is growing in importance among rural voters ahead of this July’s general election. Wen Qingnan, who runs China’s largest wool processing factory, believes Australians will come around.
Wen Qingnan, chairman of Jiangsu Tianyu Wool Industry (Zhangjiagang Free Trade Zone) Co., Ltd., said: “Once the public sees that more and more investors are contributing to the local economy and community, their attitude towards foreign investment in Australian agriculture will It will change.”
Almost since the beginning of the 19th century, Australia has been the world’s largest exporter of fine wool since it had high-quality Merino sheep flocks. But Australian fine wool exports have fallen 44% since 1981 and are expected to fall further this year, partly because wool is more expensive to produce than cotton or man-made fibres. Many sheep farmers are losing money.
Wen Qingnan hopes to reduce lamb mortality by scanning all ewes to detect multiple births and providing additional feeding and care. It is estimated that 10 million lambs die after birth in Australia every year. Wen Qingnan’s goal is to increase the lamb survival rate by 30% to 40%. Since October last year, he has also purchased 1,600 lambs, expanding the size of the flock to about 12,000.
Wen Qingnan also plans to share his technology with sheep farmers across Australia. He hopes that such efforts will help eliminate Australians’ concerns about agricultural transactions. According to Australian government data, in the latest fiscal year, the amount of investment projects proposed by entities from mainland China and Hong Kong surged four times from the previous fiscal year, reaching 2.5 billion Australian dollars (about 1.8 billion U.S. dollars).
Meredith Painter, director of food and agriculture at law firm King & Wood Mallesons, said: “Those places where transactions are smooth and successful are also places where foreign investors, especially Chinese investors, engage with local communities. “In 2015, Painter served as a consultant to help a joint venture composed of China New Hope Dairy and others acquire an Australian dairy company.
The article stated that foreign investment is crucial to the development of agriculture, especially according to data from the ANZ Bank. By 2050, the gap between the funds required for Australian agriculture and the funds that can be raised domestically may reach 850 billion Australian dollars.
The lack of domestic funds has not dispelled Australians’ concerns that foreign investors will threaten their domestic food security. According to a 2014 poll by the Lowy Institute for International Policy, about 60% of Australians opposed foreign investment in Australian agriculture, and 56% of respondents said that the Australian government approved too many investment projects from China.
Earlier this month, Shanghai Pengxin Group gave up its A$317 million bid for Kidman, Australia’s largest beef producer, due to opposition from the coalition government of Australia’s Liberal Party and National Party. Kidman Company owns 101,000 square kilometers of land, accounting for approximately 1.3% of Australia’s land area. Labor said the Australian government’s move could send the wrong signal to foreign investors. According to a joint Fairfax and Ipsos poll published by the Sydney Morning Herald on May 21, the coalition government leads the Labor Party (49%) with a support rate of 51%.
Rural votes are crucial for Prime Minister Malcolm Turnbull in a tight election campaign. His governing partner, the National Party, has always expressed its opposition to foreign investment in Australian agriculture.
At the Lalar Sheep Farm, a 90-minute drive west of Melbourne, wool producers and purchasers from all over the country (some even from as far away as Uruguay) came to discuss production methods with Wen Qingnan. Wen Qingnan also invited local wool producers to travel to China.
According to Australian Wool Innovation estimates, if the survival rate of a single lamb is increased by 5% and the survival rate of twin lambs is increased by 10%, the annual profit of the sheep farm can be increased by up to 250 million Australian dollars. Lamb survival rates in Australia average around 15%, compared with the global average of 9% to 20%.
Wen QingnanIn an email reply to a reporter’s question, he said that the main reason for the sharp decline in Australian wool exports was the decrease in income from sheep farms. According to the Australian Bureau of Agricultural and Resource Economics and Science, small sheep farm capitalization fell by 0.4% in the five years to FY14.
Wen Qingnan said: “I firmly believe that if we can cooperate to create more wealth for Australia, public opinion will change.” Chinese businessmen help Australia revitalize the wool industry and want to eliminate concerns about agricultural transactions
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