Agriculture is attracting more and more financial investors from China’s tech sector who believe that the country’s growing middle class and concern for food safety will drive high returns on investments. Computer company Lenovo has established an agricultural subsidiary, Joyvio which plans to invest up to US$360 million in agriculture over the next five years and has already invested in kiwi fruit and blueberry production. NetEase has invested in pig farming, and Jack Ma’s Yunfeng Capital acquired a 60% stake in dairy giant Yili Industrial Group in July for US$360 million. Despite the longer typical investment period for agriculture compared to other private equity investments, the number of investors entering into agriculture is on the rise according to Deloitte, as investors see the government considering significant land reforms and reforms to how state-owned farms are run. Chinese agricultural investment is expanding beyond the country’s borders as well. Even though representing only 2% of total Chinese investment, seven major acquisitions were made in Australia’s agriculture sector in the six years to 2012.
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