Photo of Hong Kong taken from
Australia is in danger of over-simplifying its responses to Chinese investment and missing out on vital economic opportunities, warns a leading expert from The Australian National University. Professor Peter Drysdale from the Crawford School of Public Policy in the ANU College of Asia and the Pacific says Australian policy responses to Chinese overseas direct investment (ODI) have been infected by populist politics. "In Australia the policy response to the surge of Chinese ODI has been far from sure-footed and an established, well-functioning foreign investment regime has been severely shaken by undercurrents of national political populism and foreign security dog-whistling. "The element of populism in Australia's response to the rapid growth of Chinese ODI has acted as a source of political confusion in Australian policy development and in Chinese perceptions of Australian policy. "For example, Australia's Foreign Investment Review Board has introduced new investment guidelines to deal with the rush of investment from Chinese State-owned enterprises (SOEs), but this has occurred on a largely ad-hoc basis. "New foreign investment guidelines have also singled out proposals from SOEs for special scrutiny. But, the delay in considering Chinalco's bid to buy into Rio Tinto during the global financial crisis, for example, saw the bid fall over commercially, and raised questions in China about Australia's investment regime.
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