China seeks clarity
Chinese Government officials want Australia to make its foreign investment approvals process more transparent after recent knockbacks of Chinese companies’ bids for key assets.
A Ministry of Commerce official recently told Australian journalists in Beijing it should be clearer which industries were open to foreign investment and which ones were not.
The comments coincide with a new deal emerging for the sale of Australia’s biggest private landholder, pastoral company S. Kidman and Co, after the Federal Government rejected an earlier foreign takeover bid.
Treasurer Scott Morrison last year advised it would be against the national interest for Kidman to fall into foreign hands, in part citing national security grounds because some of its landholdings neighboured the weapons-testing range at Woomera in South Australia.
Under the fresh deal, the land near Woomera has been excluded and mining magnate Gina Rinehart will partner Chinese real estate firm Shanghai CRED to buy Kidman for $365 million.
The deal will require Foreign Investment Review Board approval, but Mrs Rinehart has pointed out the level of foreign ownership would actually be reduced slightly because her company Hancock Prospecting would hold a 67 per cent stake in the joint venture.
Beijing’s ire was also roused by Mr Morrison’s rejection of two Chinese suitors, including the State-owned StateGrid for NSW’s power distribution network, on national security grounds.
With Chinese companies keen to buy overseas assets, Government officials understood national security was a sovereign right but stressed the need for Australia’s approvals process to be fair, transparent and non-discriminatory.
“Sometimes you read reports that some Australian businessmen are complaining that maybe doing business in China is much harder than in Australia,” the Ministry of Commerce official said. “It’s true that China’s economy is not as open as Australia’s, but if you go review our foreign investment policy, we have a very clear line which area you can invest and which area you can’t.
“So we hope that every Government can have the same clear line.”
The official said Chinese companies were encouraged to find local partners because they knew the market, culture and legal system.
The reporter travelled to Beijing as a guest of the Chinese Embassy and the Chinese People’s Institute of Foreign Affairs.
Cows on Mardie Station.