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China seeks clarity over investment rules

AAP logoAAP 10/10/2016 Lisa Martin

There is a famous saying in China that it doesn't matter whether a cat is black or white. So long as it can catch a rat, it's a good cat.

It's a theory Beijing hopes western nations such as Australia will take on board as they grapple with the hot button issue of Chinese foreign investment.

The topic's back on the agenda this week after a $A365 million joint bid for Australia's largest private landholder S Kidman and Co by businesswoman Gina Reinhart and a Chinese partner.

The offer is conditional on the sale's approval by Australia's foreign investment review board and the Chinese government.

Treasurer Scott Morrison had scuttled an earlier bid for the asset from a Chinese-led consortium.

In Beijing, patience has started to wear thin over Australia's investment rules and decisions in the wake of other rejections.

"We do hope every country can provide a clear scheme of foreign investment. It would save our business communities time, energy and money," a Chinese Ministry of Commerce official told reporters in Beijing on Monday.

Analysts from the China Institute of International Studies - an organisation affiliated with the foreign ministry - expressed concern over what they regard as growing "anti-China sentiment" in Australia.

Prime Minister Malcolm Turnbull has previously emphasised all countries, including China, were expected to respect Australia's sovereignty when it came to foreign investment.

The treasurer blocked bids from Chinese-government owned State Grid Corporation and Hong Kong-listed Cheung Kong Infrastructure for NSW's electricity distributor Ausgrid.

Mr Morrison cited "national security" concerns in his decision to bar Chinese investors from a proposed 99 year lease of 50.4 per cent of Ausgrid.

It's understood China hasn't received any further information explaining the decision aside from what it considers vague public statements.

The Chinese foreign ministry wants more thorough explanations in the future.

"We hope Australia can provide a transparent, fair and convenient environment for Chinese companies which should not be discriminated against," an official said, adding that investment was mutually beneficial.

China is Australia's fifth largest source of direct foreign investment.

*The reporter travelled to China on a delegation hosted by the Chinese People's Institute of Foreign Affairs.

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