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Australia PM seeks standard foreign investment laws amid outcry over Chinese deal

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Australia must standardise its foreign investment laws, Prime Minister Malcolm Turnbull said on Friday, as his government faces criticism from opposition politicians about asset sales to Chinese investors.

[SYDNEY] Australia must standardise its foreign investment laws, Prime Minister Malcolm Turnbull said on Friday, as his government faces criticism from opposition politicians about asset sales to Chinese investors.

Turnbull was speaking to reporters hours after the Foreign Investment Review Board (FIRB) blocked the A$350 million (S$355 million) sale of Australia's largest cattle ranch to Chinese firms on the grounds of national interest.

That deal was blocked as opposition politicians raised security concerns about last month's A$506 million deal by the government of the Northern Territory to lease the Port of Darwin to Chinese-owned firm Landbridge.

The outcry over foreign investments could cast a pall over the sale by the government of New South Wales, Australia's largest state, of its electricity grid in a deal expected to bring in at least A$8 billion.

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Investors are due to submit bids for the first phase of what is set to be the country's largest privatisation sale on Monday and only one the four consortia expected to take part doesn't include foreign firms. "We do need to be very careful that we're not sending out mixed messages," said James Laurenceson, deputy director of University of Technology Sydney's Australian-China Relations Institute. "We have to be aware in Australia that there is international competition for Chinese investment." The FIRB approves asset sales to Chinese investors over A$252 million, but the Port of Darwin deal was not reviewed by the regulator because it was a lease.

Turnbull said his government would consult all state governments to ensure "all foreign acquisitions of the relevant size (are) subject to the same process".

In an email to Reuters, Treasurer Scott Morrison said the government was "acutely aware of the sensitivities regarding foreign investment in strategic national assets and critical infrastructure" and was working on strengthening regulations.

The Port of Darwin backlash follows similar deals that escaped political outcry.

In 2014, Australia sold Port of Newcastle, the world's busiest coal terminal, to state-owned China Merchants Group Ltd and local firm Hastings. A year earlier, it sold the second busiest container terminal to a consortium partly owned by the Abu Dhabi Investment Authority.

Hastings and the Abu Dhabi investment firm, along with Chinese, Canadian, Kuwaiti and local interests, are expected to bid for the New South Wales electricity network sale, people familiar with the matter have said.

NSW Treasurer Gladys Berejiklian told Reuters in an email she expects to announce the winning bidder by end-2015.

REUTERS

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