Australia formally bans Chinese from leasing power grid

The actions by Chinese companies were normal business activities in line with market principles, MOC spokesman Sun Jiwen said, adding that they had followed global bidding procedures and cooperated in Australia’s security inspection. Earlier this year, Australia blocked the sale of a cattle company to a Chinese consortium, citing Australia’s national interests.

Australia will block the sale of its largest electricity network to foreigners, the government said Friday, as two Chinese bids for the grid were rejected over national security concerns.

“There are many bidders that are interested in this asset”, NSW state Premier Mike Baird told reporters in Sydney on Friday, assuring the ambition has not been derailed.

State Grid said it “found it hard to understand and deeply regretted” the decision, adding it had followed regulations set by Australia in its bid and met all the bidding requirements.

The deal for the New South Wales state-owned electricity network would have earned more than 10 billion Australian dollars ($7.6 billion).

China’s commerce ministry said in a statement on its website that the decision showed uncertainty in Australia’s investment environment and would seriously hurt the willingness of Chinese companies to invest in the country.

Meanwhile, National Farmers Federation chief executive Tony Mahar asked the government to quickly provide clarity over the sale of Australian-owned and state-owned assets to foreign buyers, as it could negatively affect the chance for Aussie businesses to sell in the future.

This rejection by the Australians will only serve to convince the Chinese that they are being messed about.

Australia’s defence and intelligence agencies are growing increasingly uneasy about the level of Chinese Government influence in Australia, but Mr Morrison insists the Coalition remains open to foreign investment.

“In making this decision, national interest concerns have been paramount”, Morrison said in a statement Friday, without elaborating on what those concerns were.

Foreign bidders will likely need to restructure their deals and bring in local partners to succeed in Australia, said Matthew Fitzgerald, an Australian-based corporate partner at law firm Herbert Smith Freehills.