Australia needs to encourage foreign investment if it is to continue to develop but does that mean foreign investment at any cost or for any project? Consider the headline in the “Australian” of August 2 titled “Tycoon on the prowl” describing how Asia’s richest man is looking at getting a foothold in the Australian property market “including residential, retail and industrial property”. In the same issue of the Australian there was the headline. “Wave of Asian investment looms”.
As a result of central bank policies in developed nations there is a surplus of capital available at very low interest rates. The consequences for an open economy like Australia’s are serious. Capital flows particularly from Japan and China have accelerated into Australian bond and equity markets and increasingly into property markets. These inflows are raising the value of the AUD and it seems that capital is now… Continue reading