May 31, 2024
Australia's $223 billion sovereign wealth fund has divested its stakes in a slew of Chinese companies identified by an opposition audit as high risk because of their ties to the People's Liberation Army or alleged human rights abuses.
Among the companies that the Future Fund has sold its shares in are LONGi and Jiangsu GoodWe, which are major players in solar energy generation, and Tsingtao Brewery, which sources hops from Xinjiang province, home of the persecuted Uyghur ethnic minority.
All up, the Future Fund divested its interests in 11 companies that the Coalition identified as questionable, as well as a further five Chinese firms, according to an analysis of the fund's portfolio by the office of opposition home affairs spokesman James Paterson.
With the fund's managers to face Senate estimates today, Senator Paterson welcomed the divestments following publication of his audit, but urged the Albanese government to provide advice to private investors, including superannuation funds, about what was appropriate to invest in when doing business with China.
"Taxpayer funds and Australians' retirement savings should never be invested in companies linked to serious human rights abuses, sanctions evasion or military suppliers to an authoritarian state," Senator Paterson told The Australian Financial Review.
"But if even the Future Fund had this exposure, imagine what the less transparent industry superannuation funds are invested in.
"The Albanese government should urgently provide advice to Australia's outbound investment community to reduce the risk we are inadvertently financing morally dubious and strategically dangerous companies."
Senator Paterson's audit of the Future Fund's investments, published last year, identified 50 companies that had concerning connections. Twentytwo had ties to the Chinese government and military, and 14 to Xinjiang province, where concerns have been raised about Uyghurs being forced into labour. Other companies also had links to Russia, North Korea and Iran.
LONGi is one of the world's biggest manufacturers of solar panels. It emerged as a concern after some of its exported products were seized by US border officials in 2021 because they contained polysilicon made in Xinjiang.
GoodWe, which produces inverters and batteries, has been recognised for its work by the Chinese Communist Party and with state-owned enterprises.
One of the most intriguing companies that the Future Fund has divested its stake in is Xinjiang Guanghui Energy.
The natural gas and coal producer is based in Xinjiang but its chairman, Chinese billionaire Sun Guangxin, came on the radar of US officials when he bought ranches to build a wind farm near a US Air Force base in Texas, sparking speculation the farm could be used for gathering intelligence.
Texas governor Greg Abbott responded in 2021 by signing into law legislation banning foreign nationals of China, North Korea, Iran and Russia from operating "critical infrastructure" assets in Texas, a move copied by 15 other states.
Companies with links to the military that the Future Fund has sold out of include Canmax Technologies, which produces anti-static products to keep people and places free of contaminations, and Shanghai Fudan Microelectronics Group Co, which has been funded by the PLA to develop microprocessors and circuit boards.
Companies with supply chain links to Xinjiang included Shandong Nanshan Aluminium Co, which supplies metals for electric vehicle batteries and panels - to companies including Tesla - and Suzhou Dongshan Precision Manufacturing Co, which produces flexible circuit boards, LCD display panels and touch screens.
