The pressure to slow down growth in China has put at least one New Zealand asset manager off investing into Australia.
Greg Peacock, head of research at New Zealand Asset Management, said its investment manager in Australia had recommended pulling all its investment out of the lucky country.
"From our perspective Australia is not a place we have to be invested. We had one Australian manager who phoned us eight weeks ago and said we can have our money back because the prospects of making decent returns are not there."
Peacock said China's desire to slow growth and switch from export-driven growth to domestic growth was the main factor.
"Stimulating domestic demand doesn't require as many commodities. They will still need them but it does potentially have an impact on the price of them.
"China will still keep importing but the prospects of [Australia] exporting iron ore is slowing down."
Peacock said there were also concerns about provisioning made by the Australian banks particularly for property down the eastern seaboard where the economy was slowing.
Instead he said it was eyeing investment opportunities in America.
He said although China had 15 per cent wage growth there had been very little growth in the US while at the same time energy was getting cheaper.
"They are becoming increasingly self-sufficient. It seems that the US reacted more to the global financial crisis than others. The Federal Reserve was more concerned about going into a depression, while Europe has been worried about inflation."
Peacock said America's mid-west was doing well, with the economy driven by corn and energy in the north and refining in southern Texas.
US coastal parts were not doing so well because of the housing bust.
Peacock said the banking system in the states was robust now and could start lending again, whereas the banks in Europe were not lending.
Despite the difficult times in Europe, Peacock said the company was still investing money there but managers were confining investments to less risky businesses.
Peacock said NZAM allocated money to four managers in Europe but recently had to reclassify one manager as a global investor. The manager had changed its investment mandate to allow up to 50 per cent of its money to be invested outside Europe.