Shadow Treasurer Jim Chalmers said he would work through the detail but Labor was inclined to support the measures.
Business Council of Australia chief executive Jennifer Westacott said the changes were sensible given the unprecedented economic circumstances caused by the coronavirus but warned the government needed to get “the balance right” to minimise the impact on Australian companies and jobs.
“We’ll need to ensure that low risk investments are streamlined and approved quickly,” she said.
Victorian Premier Daniel Andrews, the leader of the only state in Australia to sign onto China’s $1.5 trillion Belt and Road infrastructure initiative said he expected investments to be scrutinised by the Foreign Investment Review Board. “It seems to me a perfectly logical extension,” he said.
The changes will apply to all foreign investors but China is expected to come under particular scrutiny after Shenzhen firm Huawei was banned from the 5G network in 2018 over national security concerns. China launched trade strikes on $1 billion worth of beef and barley in April after Australia advocated for an independent inquiry into the coronavirus. Chinese investment in Australia has plummeted by more than 68 per cent over four years and China’s foreign ministry has accused Australia of suspicion, recrimination and division.
In a new submission to a parliamentary inquiry into diversifying Australia’s trade, Charles Sturt University academic Clive Hamilton said “the historical rupture brought by the virus” was an opportunity for Australia to reduce its reliance on China after the embassy warned Australian universities, beef and wine could be boycotted by Chinese consumers. China is Australia’s largest trading partner and accounts for a third of all of Australia’s exports.
“This is a well-drilled tactic of the Chinese Communist Party. In the Party’s lexicon it’s known as yi shang bi zheng (literally, ‘using business to pressure government’),” he said.
Professor Hamilton said the government should identify those sectors of the Australian economy most prone to the tactics such as wine and tourism. He said Austrade should help them to diversify and if they ignore warnings – taxpayers should not bail them out.
Professor Hamilton said Australia should also create an easily accesible FIRB-style database for Chinese investment in the Pacific, where China has significant aid and infrastructure interests.
The Director of the Australia-China Relations Institute, James Laurenceson, told the inquiry diversifying Australia’s export markets away from China meant diversifying toward countries that are not willing to pay as much.
“Meanwhile, any trade opportunities with China that are left on the table would quickly be snapped up by Australia’s international competitors,” he said in his submission. “The combined effect will cost Australians jobs and by weakening the economy will make Australia less, not more, secure.”
Eryk Bagshaw is the China correspondent for The Sydney Morning Herald and The Age. Due to travel restrictions, he is currently based in Canberra.