16:09 | 04/02/2018 Global Economy
Australia is to tighten rules on foreign investment in electricity infrastructure and agricultural land, amid concerns about growing Chinese influence in business, politics and society.
|The Australian government of Malcolm Turnbull is to tighten rules on foreign investment in electricity infrastructure and agricultural land, amid concerns over growing Chinese influence in business, politics and society|
The decision coincided with the release of Australian electoral returns that show companies owned by businesspeople with links to China donated hundreds of thousands of dollars to political parties ahead of the 2016 federal election.
“All future applications for the sale of electricity transmission and distribution assets, and some generation assets, will attract ownership restrictions or conditions for foreign buyers,” Scott Morrison, Australia’s treasurer, said on Thursday.
Under the new rules, sales of agricultural land must first be marketed for at least 30 days to Australians before they can be sold to foreigners.
Australia is one of a growing number of countries tightening its foreign investment rules in response to record levels of Chinese investment over recent years. The UK has announced plans for tougher screening of foreign investment in critical infrastructure and last month the US blocked the proposed US$1.2bn takeover of MoneyGram, the cash transfer group, by China’s Ant Financial.
Canberra has progressively tightened its foreign investment rules since the controversial 2015 sale of the port of Darwin to Landbridge, a Chinese company. US defence chiefs, who had no prior knowledge of the deal, sounded alarm over growing Chinese influence in a city that houses a military base used by US marines.
A year later Mr Morrison blocked Hong Kong’s Cheung Kong Infrastructure and China’s State Grid from bidding for a stake in Ausgrid, a state-owned electricity distributor. This was part of a planned A$100bn (US$80bn) privatisation of state assets.
Mr Morrison said the new rules on sales of electricity transmission and distribution assets would codify those already applied, on a case-by-case basis, to previous transactions. A Foreign Investment Review Board scrutinises overseas takeovers.
Australia has been the world’s second-largest recipient of Chinese investment since 2007, with US$90bn of accumulated investment, according to a report by KPMG and the University of Sydney. The US ranks first with investments surpassing US$100bn.
Chinese investment buoyed Australia’s economy during a four-year mining sector slowdown but the purchase of farms and critical infrastructure has raised concerns in some communities. The flow of A$6m in donations to Australian political parties from Chinese — linked donors has also fuelled concerns about foreign influence. Last month a Labor MP resigned in a scandal linked to a Chinese donor.
Electoral returns published on Thursday show that AusGold Mining, a company owned by Chinese businesswoman Sally Zou, donated A$366,000 to the South Australian division of the Liberal party before the 2016 general election. Hong Kong Kingston Investment, a company linked to Chau Chak Wing, the billionaire founder of China’s Kingold Group, donated A$30,000 to the Labor party in New South Wales.
These donations were dwarfed by a A$1.75m personal donation made by Malcolm Turnbull, Australia’s prime minister, to the Liberal party.