The international business community will be watching the new Coalition government's policy on foreign investment very closely - under particular scrutiny will be Treasurer Joe Hockey's decision on Archer Daniels Midland's $3 billion bid for GrainCorp.
Needless to say the business community is viewing this deal as a test case and is pushing the liberal stance on investment. It will be a particularly interesting insight into how the Liberal Party will balance its top-priority international trade and investment agenda with the need to retain peace with legislative partner the Nationals. The balancing act is looming as a headache for Trade Minister Andrew Robb.
While the GrainCorp bid will exercise the minds of the business community in the short term, the larger national issue is the all-important relationship between Australia and China.
A free trade agreement between the two countries has been in no man's land for eight years and getting something down as a starting point is Robb's objective. But he admits finding some comprehensive solution straight up is perhaps a bridge too far. It needs to be an evolving process.
The other side of the debate is finding parameters for direct investment by China in Australia, and marrying these two issues will be the challenge for the Coalition. Nationals MPs are objecting to lifting the investment threshold on Chinese investment to $1 billion as part of a free trade agreement, setting up a possible conflict within the Liberals.
The Chinese have asked for the same treatment as in Australia's FTA with the United States, for which the business investment threshold is $1 billion compared to the usual $248 million minimum on transactions that would attract Foreign Investment Review Board attention.
The Coalition plans to drop the investment threshold for scrutiny of Chinese investment in farmland by FIRB from $248 million to $15 million. It's a position that appears to fly in the face of advancing the trade and investment relationship between the two countries. On one hand China has made its desire to ramp up its overseas investment clear. Its overseas direct investment rose to $US87.8 billion last year, according to its National Bureau of Statistics, and the government has set goals to increase this to $US150 billion in 2015.
While Chinese direct investment into Australia increased 21 per cent in 2012 to $US11 billion, China still represents less than 3 per cent of total Australian stock of investment. Most of this is in resources housed in Western Australia.
According to the chief executive of Hong Kong-listed mining group MMG, Andrew Michelmore, Australia is the most important ultimate destination for Chinese outbound investment but it is still small. He believes China wants foreign direct investment and Australia needs it.
He argues that when China announced its "Going Out" policy in 2000 it relaxed previously restrictive controls and targeted developed countries with good infrastructure, stable economies and established rule of law.
But the follow-through has not met the potential. Michelmore contends the Australian community remains cautious about welcoming further Chinese investment, particularly in agriculture. "In a 2013 Lowy Institute poll, 57 per cent of Australian respondents agreed with the statement that the 'Australian government is allowing too much investment from China'."
So the wider Australian community has a level of distrust when it comes to Chinese investment, one that is reminiscent of Japanese investment 30 years ago. Thus foreign investment by China is a politicised issue and one that is therefore difficult for any government to manage.
The other side of the coin, according to Michelmore, is that the Chinese perceive our foreign review process as unclear. There is ambiguity around what constitutes Australia's national interest.
In a globalised economy Australia, with its small population, has traditionally needed to rely on foreign inflows of capital.
So far not much Chinese investment has been targeted at the agricultural sector. But over time as the middle class in Asia grows there will be increasing interest from China and other international investors in Australia's potential as a food bowl. Billions of dollars in venture capital from the US, for example, is looking to invest in Australian agricultural technologies.