Soothing Australians' fears of China Inc
Dr Zha Daojiong, a professor of international political economy and the inaugural Lowy Institute-Rio Tinto China analyst fellow, said the intense public scrutiny on Chinese firms in Australia, including whether they are state-owned and what their perceived motivations are, was holding back the development of a more mature understanding between the countries.
"[There] seems to be an impression that there is this Australian differentiation between the colour of money," Dr Zha told BusinessDay ahead of a presentation in Sydney on Wednesday. "It seems to be across the board."
Dr Zha has spent the past six weeks at the Lowy Institute and conducted research on Chinese perceptions on investing in Australia.
He said it was natural for there to be some societal concern with the recent surge in Chinese investment, but that misinformation swirling around the issue would eventually dissipate as Australia moved beyond its current predominantly trade-based relationship with China.
The federal government, which launched its Asian Century white paper last year, says it is strengthening its ties with its Asian neighbours and actively courting investment from China. But there have been high-profile setbacks, with the government intervention in Chinalco's planned investment in Rio Tinto in 2009 a well-documented low point in bilateral relations.
More recently, the Gillard government's decision to block Chinese telecommunications giant Huawei from bidding on National Broadband Network contracts created another flashpoint, while Shandong Ruyi's investment in Cubbie Station stoked more reactionary fears of Australia "selling the farm".
Deal-makers remain desperate to attract Chinese capital, trying to match the growing Chinese appetite in agricultural assets with the desire to unlock Australia's potential to be a key food producer for the growing Asian middle-class. Chinese interest in the resources and property sector also remains strong.
But the blockbuster deals synonymous with the peak of the mining boom appear to be a thing of a past, with headlines now instead increasingly characterised by the fallout between investment partners, such as the stoush between Clive Palmer and his Chinese partner for the multibillion-dollar Sino Iron project, Citic Pacific, as well as more recent frustrations including the troubled Chinese takeovers of Sundance Resources and Discovery Metals.
Fresh revelations around the scale of China's organised institutional hacking have also damaged China Inc's credibility.
And while it is often suggested that Chinese investors are left perplexed or feel discriminated against by the Foreign Investment Review Board rules, Dr Zha said it was more a topic of Australian introspection, with Chinese investors relaxed about the regime. "It's very much like I want to go to your house and you ask me to take off my shoes, so I take off my shoes," he said.
Frequently Asked Questions about this Article…
Everyday investors often see intense public scrutiny around Chinese investment in Australia, including worries about whether investors are state-owned, their motivations, and the so‑called "colour of money." The article notes these concerns are natural but can be amplified by misinformation.
According to Peking University scholar Dr Zha Daojiong, Chinese executives want their business credentials and commercial motives to be the focus rather than their country of origin — they prefer assessments based on the deal and company quality, not nationality.
Yes. The article cites several examples: the federal intervention in Chinalco's planned investment in Rio Tinto in 2009, the Gillard government blocking Huawei from bidding on National Broadband Network contracts, and public backlash around Shandong Ruyi's investment in Cubbie Station.
Deal‑makers are actively targeting Chinese capital for agricultural assets, resources and the property sector. The article highlights a particular push to position Australia as a key food producer for the growing Asian middle class.
No. The piece says the blockbuster deals of the mining peak appear to be largely in the past. Recent headlines have focused more on breakdowns between partners — for example the dispute between Clive Palmer and Citic Pacific over the Sino Iron project — and troubled takeovers such as Sundance Resources and Discovery Metals.
Yes. The article notes that fresh revelations about the scale of organised institutional hacking have damaged China Inc's credibility, adding to public concerns around some Chinese investments.
Dr Zha told BusinessDay that Chinese investors themselves are generally relaxed about the FIRB regime. He suggests the anxiety is more a matter of Australian introspection than widespread Chinese complaint.
Everyday investors should track government policy and public sentiment toward foreign investment, the quality and transparency of potential Chinese partners, and sector trends (agriculture, resources, property). The article also implies watching for deal‑partner disputes and regulatory headlines that can affect asset values.
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