China says blocked power grid deal will deter Chinese firms from investing in Australia
Australian government is ‘protectionist’ in stopping Chinese companies from taking a stake in Ausgrid, says Commerce Ministry
Australia’s decision to block the A$10 billion (HK$59.5 billion) sale of the country’s biggest energy grid to Chinese bidders was a protectionist move that would negatively affect investment in the country, China’s Ministry of Commerce said on Wednesday.
Australian Treasurer Scott Morrison said last week that preferred bidders State Grid Corp of China and Hong Kong’s Cheung Kong Infrastructure Holdings would be prevented from buying electricity network company Ausgrid, citing unspecified national security concerns.
“This kind of decision is protectionist and seriously impacts the willingness of Chinese companies to invest in Australia,” China Commerce Ministry spokesman Shen Danyang said at a regular news briefing in Beijing.
“China hopes Australia will create a fairer and more transparent environment for Chinese investment.”
The Commerce ministry’s remarks came as the Chinese embassy in Australia issued a statement to The Australian newspaper on Wednesday, warning that Canberra’s rejection showed “clear protectionist tendencies” and would have a “serious impact on the enthusiasm” of Chinese investors.
“The Chinese government is highly concerned about the statement by the Australian Treasurer on his preliminary decision to block the sale ... on national security grounds,” the embassy said.
The Chinese embassy noted that the decision was the second time this year the government has rejected bids for Australian assets by Chinese interests, referring to a bid by a China-led consortium to buy cattle company Kidman & Co.
Morrison rejected the A$371 million offer from a group headed by Hunan Dakang as also not in the national interest despite the bid with partners Shanghai CRED Real Estate Stock Co and local company Australian Rural Capital being revised after a preliminary rejection.
Australia’s decision to reject the Ausgrid deal underscores the country’s changing political climate since a handful of protectionist senators took power in elections last month. The decision also sets new parameters to the relationship between Australia and its biggest export partner just eight months after a A$100 billion free trade agreement took effect.
“The Australian side stated on many occasions that it welcomes Chinese business investment, but made decisions just to the contrary,” the embassy said in its statement.
Australia’s Prime Minister Malcolm Turnbull used a major speech on Wednesday to criticise the rising tide of protectionism within parliament, despite his government being responsible for the rejection of the Ausgrid and Kidman bids.
“Political divisions in advanced economies, particularly where there is high unemployment or a high risk of unemployment, are feeding on a sense of disenfranchisement among many people who feel the rapid economic changes of our time have left them behind,” Turnbull said.
The speech warned against giving in to the growing protectionist mood reflected in the new parliament, which he said could reverse gains made by the country since it liberalised its economy two decades ago.
“Political responses to this mood of disaffection can have the potential to destabilise global growth, perhaps even reversing some of the spectacular gains we have made over recent decades through open markets and free trade.”
Turnbull’s conservative Liberal-National coalition has a one-seat majority in parliament’s lower house but must rely on either the main opposition Labour Party or eight to 10 independents or minor party Senators to pass laws in the upper house.
The new parliament, which sits for the first time on August 30, includes a bloc of foreign investment critics led by the Far-right One Nation party.