China accelerates overseas food investment as safety scares hit

China's food safety concerns are accelerating the country's overseas investment in food and beverage companies and agriculture.

Chinese outbound direct investment in agriculture and technology has increased sharply over the past few years, according to Ernst & Young.

It represented 15 per cent of all Chinese outbound direct investment in the first half of this year compared with 4 per cent in 2009.

The value of major Chinese outbound merger and acquisition in food and agriculture exceeded US$9 billion from 2010 to September this year, according to an estimate by the Economist Intelligence Unit (EIU).

National Australia Bank, which describes itself as Australia's biggest "agri-business" bank, is involved in several potential Chinese investments in Australian agriculture and food, said the Asia head of institutional banking, David Thorn.

"There are many opportunities we have at the moment for Chinese investment in Australian agriculture," Thorn said.

"Demand for safe and nutritious food will rise dramatically across the Asia-Pacific region as purchasing power increases.

"China's food and agriculture giants will play an increasingly larger role as far as food safety and security is concerned, not only in China but across Asia."

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