King & Wood Mallesons managing partner Scott Gardiner told the session that in his firm's dealings with Chinese state-owned enterprises he was not seeing concerns around FIRB raised anywhere near as much anymore and most of the heat had come out of the issue.
Gardiner said there was a growing level of sophistication in Chinese SOE bidders and, with significant port assets becoming available for purchase in the near term, Australia would see these bidders come back to table with a more mature approach to working with Australian partners.
Providing a brief chronology of Chinese outbound investment trends, Satori Investments Greater China national vice-president Paul Glasson said 2010 and 2011 were the best years, reflecting the previous Chinese government's highly facilitative approach to outbound Chinese investment in its final years.
Glasson said 2012 was a very lean year, mainly as a result of the build-up to the 18th Chinese Congress and the level of uncertainty that pending change created with SOE decision makers.
There was a slump in internal Chinese investment in that period as well, particularly in the real estate sector.
Last year was a changing year, according to Glasson, where we still saw high prices and support at government level for outbound investments.
"There was a lot of effort last year by the Australian government to provide better context around how FIRB makes decisions," Glasson said.
This education endeavour by the government helped allay significant concern at the investment manager level.
However, areas of interest from SOEs are changing and a change is emerging in the way deals are done, with a greater attempts being made by the Chinese to work with local entities in joint ventures.
China International Capital Corporation research department managing director Helen Cai told delegates that in her experience SOEs were now looking for larger projects as a priority and would only look at greenfields projects if they could ramp up in two years or less.
Glasson emphasised this comment in terms of the timeframe of investment, pointing out that someone within an SOE had to sponsor any deal and the longer an investment ran, the greater the risk it was to senior sponsors within the enterprise.
