West Australian Premier Colin Barnett has claimed that Australia’s foreign investment rules discriminate against China and should be changed.
As APP reports, Barnett claims that investment from China come under greater scrutiny from the Foreign Investment Review Board (FIRB) because most large enterprises in China are state-owned.
As it stands, privately-owned Chinese companies can invest $248 million in Australia without it being reviewed by the Foreign Investment Review Board (FIRB).
However, the United States and New Zealand can invest more than $1 billion in Australia without being scrutinised by the FIRB.
And, in the case of Chinese state-owned enterprises, all investments must be approved by the FIRB.
Barnett says that this threshold needs to be changed because it is holding back potential investment.
Finance Minister Mathias Cormann defended the foreign investment rules and claimed that no countries were subject to discrimination.
Cormann told Sky News Australia that it was appropriate to treat state-owned enterprises differently to private companies.
Rather than relaxing the regulations, the government is planning to tighten them. As The Australian reports, the plan is to lower the FIRB threshold for examining purchases of agricultural land to $15 million, and to set threshold for agribusiness at $53m.
The Federal Opposition is opposed to this policy and claims that it will make the government’s attempts to establish a free trade agreement (FTA) with China impossible.
Speaking on the ABC Lateline program, the Opposition’s trade spokesman Richard Marles said, “It’s the single most important ambition China has in negotiating an agreement with us.”
“The only reason why you reduce that FIRB threshold is because of pandering to xenophobic attitudes which exist in the Coalition and the National Party. Now, that’s what Tony Abbott needs to stand up to,” he added.
As it stands, the total size of Chinese investment accounts for just 1 per cent in Australia’s inbound investment. In comparison, the US accounts for 29 per cent, the UK 23 per cent and Japan 6 per cent.