From the AFR:
Tony Abbott has committed a Coalition government to a tougher approach to control of existing businesses in Australia by Chinese state-owned companies and urged Beijing to pursue political reforms and have greater respect for human rights.
On his first visit to China as Opposition Leader, he supported Chinese state-owned enterprises (SOEs) developing greenfield assets in Australia especially in northern agriculture, but warned them off buying established businesses.
“It would rarely be in Australia’s national interest to allow a foreign government or its agencies to control an Australian business,” he said.
This will no doubt play well with the populists and you can the see in the cautious way that both the AFR and The Oz approach criticism, buried in the first and missing in the second, that they’re not interested in holding the Opposition leader to account. Imagine if the PM had said this.
But Abbott has this back to front. I see no reason why we should restrict Chinese SOEs from buying existing Australian businesses. Australia needs the capital and the expertise that comes with international investment. That it comes from SOEs isn’t relevant. The exception is when that ownership threatens strategic interests, as in the case of Rio Tinto and Chinalco. Preventing these kinds of takeovers should be be policy.
But a blanket ban is a bad idea, especially when combined with the emphasis on human rights and political reforms (which I agree we should underline). Why is China being singled out? What about the big holdings of Singapore’s SWF’s and others too that have dubious democratic credentials?
Is this the leading edge of a hawkish China policy from the Coalition? You couldn’t blame the Chinese for thinking so.
