China is condemning Australia's move to amend its Foreign Acquisitions and Takeovers Act, which it claims could be targeting Chinese investments. The country's Ministry of Commerce advised Australian lawmakers to ensure that the sweeping changes to its foreign investment policy should be non-discriminatory and fair to all countries.
The response comes after Australia had announced last week that it will be moving ahead with its plans to make major changes to its foreign investment policy for the first time since it was established in 1975. The changes, which were proposed in late-March, are aimed at "safeguarding" the country's pandemic-hit companies from foreign takeovers.
While the changes did not specifically mention Chinese investors, several news outlets had speculated that the amendments were likely made to protect against major investments from China. Under the proposed changes, the threshold for reviews for new foreign investments will effectively be removed. This means that all new deals will have to go through a review by the Foreign Investment Review Board (FIRB).
Prior to the changes, foreign investments that had a value of more than $290 million were the only ones that were subject to a review. The threshold is higher for investments made by countries that have a standing free-trade agreement with Australia, which includes China.
Ministry of Commerce spokesman Gao Feng mentioned during a media briefing that Australia should ensure a fair investment environment for all foreign investors, including those from China. He added that Chinese investments have contributed tremendously to Australia's economy and will continue to do so if the country maintains its transparent and open policies.
Australia has maintained that the changes to its foreign investment policy are not targeting any specific country. It added that the changes were necessary as the country adapts to the emerging risks and global developments, particularly those caused by the global coronavirus pandemic.
The change to its policy does come at a very precarious time as tensions between China and Australia continued to be elevated. China recently slapped added tariffs on key Australian imports such as barley. China also banned the importation of Australian beef. The Chinese government also issued a travel advisory that warned tourists of a spike in racial attacks, allegations which the Australian government has denied.
Since last year, Chinese investments in Australia have continued to decline. In 2019, Chinese investments in the country had dropped by nearly 80 percent to around $2.4 billion when compared to investments made in 2018. According to the University of Sydney, last year's drop was the largest on record since 2007.
