Former Prime Minister John Howard called for Australians to relax on Chinese foreign investment and called the current debate juvenile. But this is in contrast to the current approach of the opposition. Barnaby Joyce has called previously for an outright ban on Chinese investment in Australia, citing the nexus of government and corporate ownership. And Tony Abbot looks set to toughen the requirements of foreign investment into Australia. The government, meanwhile, refused to allow telecommunications Huawei, which is not owned by the Chinese Government, to participate in the NBN. But why is Australia so confused about the issue? Does the fact that Chinese corporations are state owned mean that Australia should be concerned about too much Chinese influence?
For one thing, it is true that the vast majority of Chinese investment in Australia comes from some sort of government entity. Ninety-five per cent of investments from China worth over $US 100 million are from State Owned Enterprises. Barnaby Joyce has said that this is equivalent to the Chinese government coming into Australia and stealthily buying up influence. The concern is that Chinese companies are not like ordinary private companies. If you pierce the Chinese corporate veil you won’t reveal some private businessman, but pinprick the Chinese government behemoth.
The problem with this reasoning is that it is discriminatory in approach. Unease about Chinese investment is not matched by concern over American or European investment. Is there actually evidence that government control of a corporation will corrupt the profit motive? What about the benefits that Chinese foreign investment will bring to Australia?
The ANU is fortunate to be at the centre of Australia’s public debate on Chinese investment. On September 5 the Crawford School will present a public forum attended by the former and current Secretaries to the Treasury – Ken Henry and Martin Parkinson, along with a number of China experts from around the region. The forum will be an opportunity to discuss the pros and cons of China’s investment in Australia and will give an insight into the motivation and true character of Chinese companies.