China has described the blockage of the sale of Australia’s biggest energy grid to Chinese bidders as a protectionist move that negatively affects Chinese firms’ willingness to invest in the country.
China’s Commerce Ministry warned Canberra on Wednesday that its decision to reject the half sale of electricity distributor, Ausgrid, would have “a serious impact on the enthusiasm of Chinese firms to invest in Australia.”
Noting that Beijing was “highly concerned,” Commerce Ministry spokesman Shen Danyang told a regular news briefing that China hoped Australia would create “a fairer and more transparent environment” Chinese investment.
In a note earlier, the Chinese embassy to Australia said the decision indicated “clear protectionist tendencies” in an Australian government that had “stated on many occasions that it welcomes Chinese business investment, but made decisions just to the contrary.”
China State Grid and Hong Kong-based multinational conglomerate, Cheung Kong, had offered around A$10 billion ($7.7 billion, 6.8 billion euros)for buying 50.4 percent of Ausgrid.However, Australian treasurer Scott Morrison said last week that the Chinese bidders would be prevented from buying the electricity network, citing unspecified national security concerns.
Ausgrid, which supplies power to 1.6 million people in the New South Wales (NSW) territory, was contemplating leasing half of its electricity grid for 99 years. Last November, the NSW government also gave a 99-year lease of electricity company TransGrid to a consortium comprising Canadian, Middle Eastern and local investors for $A10.27 billion.
The decision was the second time this year Canberra has rejected bids for major Australian assets by Chinese interests. It previously knocked back an offer by a China-led consortium to buy the country’s largest agricultural land owner, cattle company Kidman & Co.
Australian Prime Minister Malcolm Turnbull used a major speech on Wednesday to criticize the rising tide of protectionism within parliament, despite his government being responsible for the rejection of the Ausgrid and Kidman bids.
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 liberalized its economy two decades ago.
Chinese investment in Australia surpassed A$14.29 billion in 2015, according to a report by accounting firm KPMG and the University of Sydney.
The government wants to re-invest income from the sale of state-owned assets in the economy to create jobs and improve public infrastructure, including public transport networks.
“These are the transactions Australia needs if it is going to get out of the low growth, low productivity scenarios,” Brendan Lyon, chief executive of industry lobby group Infrastructure Partnerships Australia told the news agency Reuters.
But former senior defense department official Peter Jennings warned that Australia’s trade relationship with China put the country in a difficult strategic position.
“We’ve never had a greater dependency with any country,” said Jennings, now a director at the Australian Strategic Policy Institute. “The risk that creates for us is if Beijing wants to adopt politically coercive policies, it’s in a fairly strong position to do so with us because of that level of trade dependence,” he added.
uhe/kd (Reuters, AFP, dpa)