Under Australia’s foreign investment review framework all foreign governments and their related entities should notify the federal government and gain approval before making a direct investment in Australia regardless of the value of that investment. Yet can Australia’s current policy settings be maintained in their current form given the pace and scale of change since the framework was first established in 1975? The economic and political reality for Australia is that its future economic well-being has become increasingly intertwined with Asia, especially China. The rising significance of investments by Sovereign Wealth Funds (SWFs) and State-Owned Enterprises (SOEs) from that jurisdiction, which together come under the banner of ‘state capital’ pose complex and unresolved questions of the interaction between corporate and political purpose. Moreover, they force reflection on what role government can or should play in limiting foreign investment into domestic capital markets? The purpose of this paper is to enquire whether, in a changing global landscape, the Australian legal and policy framework for deciding foreign investment proposals remains fit for purpose. The use of case study analysis has broader significance given the extent to which China is increasing its scale and range of foreign direct investment around the world. In the lead up to the Global Financial Crisis, Sovereign Wealth Fund investment strategies had become increasingly contentious. Australia went further, linking concern about potential hidden political motives to the investment strategies of SOEs, which further refined the policy environment. The extent to which this refinement reflects the national interest or the elevation of protectionism remains highly contested.