China warns against threat to ties and investment from Australian ‘protectionism’

The Chinese government has warned Australian “protectionism” could harm ties and threaten future investment between the two countries in the wake of the federal government’s preliminary decision last week to block the sale of Ausgrid to buyers from China and Hong Kong.

Treasurer Scott Morrison is widely expected to follow through in a final decision later this week and block the state-owned China State Grid and Hong Kong’s Cheung Kong Infrastructure from acquiring a majority stake in the NSW electricity provider via a 99-year lease based on national security grounds.

There are concerns what Scott Morrison’s decision to block the sale of Ausgrid will mean for NSW and the repercussions for future foreign investment. Courtesy ABC News 24, Nine Network.

“This kind of decision is protectionist and seriously impacts the willingness of Chinese companies to invest in Australia,” Chinese Commerce Ministry spokesman Shen Danyang said at a regular news briefing in Beijing on Wednesday.

“China hopes Australia will create a fairer and more transparent environment for Chinese investment.”
Treasurer Scott Morrison is widely expected to follow through with a final decision on the Ausgrid sale this week.

The sentiment was echoed by China’s foreign ministry, which described the decision as “investment protectionism” and urged the Australian government to “avoid discrimination and provide a fair environment”.

“Chinese companies investing in Australia have always followed market principles and abided by local laws and regulations,” a foreign ministry spokesman said in a statement, adding the Australian decision had attracted “deep concern”.
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“Investment protectionism will only bring harm, not benefit, and is unsustainable.”

The Chinese embassy in Australia joined the chorus by pointing out China State Grid had been invited to make a binding offer before it was then rejected.

“The Australian side stated on many occasions that it welcomes Chinese business investment, but made decisions just to the contrary,” it said in a statement to The Australian.

The Ausgrid decision marks the second time the Turnbull government has rejected Chinese bids for major Australian assets, after blocking a China-led consortium’s efforts to acquire Kidman & Co, Australia’s largest agricultural landowner.

It also comes just eight months after the China-Australia free-trade agreement came into effect, with both countries then hailing it as a high point in the diplomatic ties between the countries.

A joint Australia-China economic report released on Monday urged both countries to negotiate a bilateral investment agreement with a “negative list” of which sectors would be ruled out from investment from either side, in part to avoid repeats of diplomatic friction seen now.

A Treasury spokesperson said: “The Government has a non-discriminatory foreign investment policy and welcomes foreign investment as a key source of additional capital for economic growth and employment opportunities for Australians where such investment is not contrary to the national interest.”

Extracted from: http://www.smh.com.au/federal-politics/political-news/china-warns-against-threat-to-ties-and-investment-from-australian-protectionism-20160817-gquzg8.html

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