More Chinese companies are investing in Australia's manufacturing and retail industries than its once sought-after mining sector, a new study by HSBC shows.
Of the over 250 Chinese firms surveyed by HSBC in December, more than 52 percent of those invested in Australia had interests in manufacturing, while 28 percent were in non-mining import/export industries. Mining took up only 20 percent of Chinese investments, according to the study.
This is in sharp contrast to the scenario just a year back when a huge chunk of Chinese investments went into Australia's resources sector. According to Australia's Foreign Investment Review Board, between 2006 and 2011, mining attracted 80 percent of this investment. China's approved proposed investment in Australia totaled $16.2 billion in the fiscal year ended June 2012.
"This diversification of Chinese investment beyond mining, particularly by middle market and corporate Chinese businesses, aligns with the Australian economy's re-balancing towards non-mining sectors," James Hogan, head of commercial banking, HSBC Bank Australia said in a note.
The findings come as a slowdown in Australia's mining sector is expected to take place this year following a peak in investments, which has fueled a decade long boom and spurred economic growth.
Economists have voiced concerns on whether Australia will be able to re-balance its economy from mining-led growth to being more reliant on revenue from domestic sectors like retail and housing.
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According to Hogan, as Australia makes this shift, China's increasing demand for high-end manufacturing, renewable energy and agricultural products will open up "new opportunities for Australia."
The survey also revealed that Australia was the third most sought after international destination for investment by mainland Chinese firms after Greater China - that includes Hong Kong and Taiwan - the U.S. and Singapore.
Hogan said Australia's "business-friendly" environment with strong legal and governance frameworks make it a big draw for Chinese firms entering Australia.
Despite the strong Australian dollar putting upward pressure on production costs, high-end manufacturing in Australia will be the key beneficiary of Chinese investment, according to Hogan.
"Industries and companies that have strong expertise, precision and high-skill will be highly sought after by Chinese companies for investment," he said.
-By CNBC.com's Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu