NEW opposition finance spokesman Barnaby Joyce has called for an outright ban on investment by Chinese state-owned companies in the Australian resources sector.
Senator Joyce's warning about doing business with government-owned entities yesterday came as Wayne Swan said Australia's foreign investment regime could be better explained, ordering the Foreign Investment Review Board to work closely with Australia's embassies abroad to explain foreign investment policies. Guides to Australia's investment rules written in Chinese, Japanese and Bahasa are being prepared.
Senator Joyce said that, although he welcomed foreign investment by private companies, investment in sovereign resources by government-owned businesses turned corporate disputes into diplomatic disputes.
"The difference between a corporation and a government is governments have armies, seats at the United Nations and can say the word `no' and you can't do much about it when they do," he said. "This is a confusion I don't want my nation to get into."
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He was responding to an attack by the Treasurer, who said Senator Joyce's views on foreign investment came from the "reactionary fringe".
In an address to the business group Global Foundation yesterday, Mr Swan said Chinese foreign investment was controversial, as were previous waves of investment from Japan, the US and Britain. "Each successive wave of foreign investment reinforced a pattern we see today with China, where successes in trade led to successes in investment," he said.
Mr Swan said China had ranked only 10th among applications for investment projects above $500 million over the last two years, far behind Britain and the US. Mr Swan quoted Treasury analysis showing that, without foreign investment over the past few years, business investment would be 25 per cent lower, the GDP would be 3 per cent smaller, and there would be 200,000 fewer jobs. Mr Swan said a review of foreign investment had to be conducted on a case-by-case basis and there were three consistent themes in government consideration:
lThat close scrutiny be given to investments in resource companies by their customers, particularly where there is potential control over pricing and production;
lThat foreign investment in a resource company should not interfere with Australia's ability to be a reliable supplier to all potential trading partners; and
lThat foreign buyers of companies listed on the stock exchange should retain the listing in the interests of transparency.
Mr Swan agreed with a Senate report that Australia's foreign investment guidelines could be explained better and has asked the Foreign Investment Review Board to work more closely with Australia's embassies.
Senator Joyce said he was amazed at the acceptance of Chinese investment, after China's arrest of Rio Tinto's iron ore negotiating team led by Stern Hu