This paper examines two issues posed by the prospect of a significant rise in foreign direct investment (FDI) from China into the Australian resources sector.
Is the surge of FDI into Australian mining and energy consistent with achieving the traditional gains from foreign investment? And are there any particular problems associated with investment from foreign state-owned enterprises or state managed sovereign wealth funds? The authors argue there are no issues that cannot be dealt with under the umbrella of the established test of ‘national interest’ in managing the growth of Chinese FDI into the Australian minerals sector. They say that a confusion has been introduced into policy over the questions of state-ownership and supplier-buyer relations in respect of Chinese investments and that clarifying these issues is likely to be important to Australia‘s capturing the full benefits from the growth of Chinese resources demand and longer term economic and strategic interests in China.