China has lashed out at Australia for blocking a $300million deal that would have seen a Beijing-backed firm with links to the Chinese military in control of a major construction company.
Treasurer Josh Frydenberg shot down the offer made by state-owned China State Construction Engineering Corporation to acquire Australian-based company Probuild over national security concerns.
It’s the latest escalation in a diplomatic spat between the two countries which have been at loggerheads since Australia called for an independent inquiry into the role of Chinese officials back in April, in the wake of the coronavirus pandemic which began in Wuhan in November 2019.
Since that time the authoritarian state has brought in a litany of tariffs and unofficial bans on billions of dollars worth of Australian exports including barely, wine, beef, seafood, copper, coal, cotton and timbre.
Treasurer Josh Frydenberg (pictured right) blocked a $300million deal that would have seen a Beijing-backed firm with links to the Chinese military in control of a major construction company (Chinese President Xi Jinping pictured left)
Probuild built major national infrastructure including Victoria’s police headquarters’ design and vaccine laboratories
On Tuesday, Mr Frydenberg said the government does not comment on the application of the foreign investment screening arrangements.
But Probuild’s South African owners Wilson Bayly Holmes said in a statement the Australian government made the decision based on national security grounds.
In response, the Chinese Embassy accused Australia of ‘weaponising’ national security.
‘If the reports proved true, this is the latest case that Chinese investment is discriminately targeted,’ a spokesman said.
‘We are deeply concerned about the relevant reports on Probuild.
‘Weaponising the concept of national security to block Chinese investment is detrimental to mutual trust as well as bilateral economic and trade relations.
‘We urge the Australian government to provide a fair, open and non-discriminatory environment for all foreign investors including Chinese enterprises as promised.’
Relations between Australia and China have soured since Prime Minister Scott Morrison last year called for an independent investigation into the origins of Covid-19. Pictured: Chinese President Xi Jinping, left, Premier Li Keqiang, second from left, and other top leaders attend a New Year gathering on December 31, 2020
The comments come as Beijing continues to threaten billions of dollars in Australian exports as retaliation for Canberra speaking out on China’s human rights abuses in Hong Kong and Xinjiang.
Probuild executive chairman Simon Gray slammed the Australian government’s decision as a ‘joke’.
He said the decision was political and that no reason was given as to why the deal poses a national security risk.
Construction firms are a major focus of the Foreign Investment Review Board as intimate access to blueprints can reveal major weaknesses for those who occupy the building.
Probuild constructed the Victoria Police headquarters and are currently in the process of knocking up CSL’s Melbourne centre where the biomedical giant will produce Covid-19 vaccines.
The Victoria Police headquarters in Melbourne (pictured) was constructed by Probuild
Probuild are currently in the process of knocking up CSL’s Melbourne base (pictured) where the biomedical giant will produce Covid-19 vaccines
With the lingering threat of bugging and surveillance by the Chinese Communist Party, it is speculated that no state-owned enterprises will be granted acquisitions any time soon.
The Australian government has rejected several other Chinese takeovers in the past six months, beyond traditional critical infrastructure sectors, including in the construction and technology industries, the Australian Financial Review reported.
Mr Frydenberg last year rejected China Mengniu Dairy Co’s proposed $600million bid for Lion Dairy & Drinks and the CK Group’s $13billiion bid for Australia’s east coast gas pipeline owner APA Group in 2018.
Australia also sensationally blacklisted China’s Huawei in 2018 from participating in the construction of the country’s national 5G network.
Chinese Foreign Ministry Spokesperson Zhao Lijian who recently made headlines for posting a doctored image of an Australian soldier cutting the throat of an Afghan child accused Australia of ‘politicising’ trade.
Chinese Foreign Ministry Spokesperson Zhao Lijian who recently posted this image to Twitter to accused Australia of ‘politicising’ trade.
‘The Australian government has been politicising trade and investment issues, violating market principles and the spirit of the China-Australia free trade agreement, and imposing discriminatory measures on Chinese companies,’ he said.
‘We hope Australia will adhere to the principle of open market and fair competition and provide a fair, open and non-discriminatory business environment for foreign companies including Chinese ones.’
Australian Strategic Policy Institute executive director Peter Jennings told The Australian that rejecting CSCEC’s takeover bid was the right call given almost all state-owned companies in China have links to the military.
‘We are going to see more and more of these types of refusals,’ he said.
How China’s feud with Australia has escalated
2019: Australian intelligence services conclude that China was responsible for a cyber-attack on Australia’s parliament and three largest political parties in the run-up to a May election.
April 2020: Australian PM Scott Morrison begins canvassing his fellow world leaders for an inquiry into the origins of the coronavirus pandemic. Britain and France are initially reluctant but more than 100 countries eventually back an investigation.
April 15: Morrison is one of the few leaders to voice sympathy with Donald Trump’s criticisms of the World Health Organization, which the US president accuses of bias towards China.
April 21: China’s embassy accuses Australian foreign minister Peter Dutton of ‘ignorance and bigotry’ and ‘parroting what those Americans have asserted’ after he called for China to be more transparent about the outbreak.
April 23: Australia’s agriculture minister David Littleproud calls for G20 nations to campaign against the ‘wet markets’ which are common in China and linked to the earliest coronavirus cases.
April 26: Chinese ambassador Cheng Jingye hints at a boycott of Australian wine and beef and says tourists and students might avoid Australia ‘while it’s not so friendly to China’. Canberra dismisses the threat and warns Beijing against ‘economic coercion’.
May 11: China suspends beef imports from four of Australia’s largest meat processors. These account for more than a third of Australia’s $1.1billion beef exports to China.
May 18: The World Health Organization backs a partial investigation into the pandemic, but China says it is a ‘joke’ for Australia to claim credit. The same day, China imposes an 80 per cent tariff on Australian barley. Australia says it may challenge this at the WTO.
May 21: China announces new rules for iron ore imports which could allow Australian imports – usually worth $41billion per year – to be singled out for extra bureaucratic checks.
June 5: Beijing warns tourists against travelling to Australia, alleging racism and violence against the Chinese in connection with Covid-19.
June 9: China’s Ministry of Education warns students to think carefully about studying in Australia, similarly citing alleged racist incidents.
June 19: Australia says it is under cyber-attack from a foreign state which government sources say is believed to be China. The attack has been targeting industry, schools, hospitals and government officials, Morrison says.
July 9: Australia suspends extradition treaty with Hong Kong and offers to extend the visas of 10,000 Hong Kongers who are already in Australia over China’s national security law which effectively bans protest.
August 18: China launches 12-month anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry.
August 26: Prime Minster Scott Morrison announces he will legislate to stop states and territories signing deals with foreign powers that go against Australia’s foreign policy. Analysts said it is aimed at China.
October 13: Trade Minister Simon Birmingham says he’s investigating reports that Chinese customs officials have informally told state-owned steelmakers and power plants to stop Aussie coal, leaving it in ships off-shore.
November 2: Agriculture Minister David Littleproud reveals China is holding up Aussie lobster imports by checking them for minerals.
November 3: Barley, sugar, red wine, logs, coal, lobster and copper imports from Australia unofficially banned under a directive from the government, according to reports.
November 18: China releases bizarre dossier of 14 grievances with Australia.
November 27: Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports where they have been denied entry.
November 28: Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ or sold at below-cost. The claim is denied by both Australia and Chinese importers.
November 30: Chinese foreign ministry spokesman Lijian Zhao posted a doctored image showing a grinning Australian soldier holding a knife to the throat of an Afghan child. The move outraged Australians.
December 12: Australian coal is added to a Chinese blacklist.
January 11, 2021: Australia blocks $300million construction deal that would have seen state-owned China State Construction Engineering Corporation takeover Probuild. The bid was blacked over national security concerns.
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