From The Australian:
AUSTRALIA will undertake a major rethink of its investment stance towards China, with the Rudd government now prepared to discuss reducing hurdles to Chinese investment as it strives to conclude a free trade agreement with Beijing.
…A comprehensive Australia-China FTA rocketed back on to the political radar after Kevin Rudd and Chinese President Xi Jinping pledged to revive the talks in a phone discussion shortly after Mr Rudd’s return to the leadership last month.
But any move on increasing Chinese investment access amounts to a calculated political risk. As beneficial as such a move might be to the Australian economy, it is hotly opposed among parts of the community.
In an interview with The Australian yesterday, Mr Marles said China wanted an increase to the threshold at which non-state investments were referred to the Foreign Investment Review Board.
Under the current rules, companies or individuals from China and most other countries are subjected to FIRB approval for investments of $248 million or more. It’s believed China wants this increased to the $1 billion threshold that applies to US and New Zealand investors. China is also believed to be seeking an end to the automatic referral of all state-owned entity investments to the FIRB regardless of value.
Regular readers will know that I have few issues with foreign direct investment and would support liberalisation of the regime. If we are to bridge our mining investment gap then investment of all sorts should be welcome.
However, give the strategic importance of Australian minerals to China, the proposed change to the automatic referral rule has an ice-block’s chance in Hell of getting up and rightly so. It wouldn’t do to have some Chinese state owned enterprise wade in and pick off BHP without some way of blocking it.
There are limits!
