Malcolm Turnbull has slammed the ‘scare campaign’ of protectionism at the G20

CHINA has called on the Prime Minister to maintain a fair and predictable investment environment after being knocked back from multi-billion dollar deals.

Prime Minister Malcolm Turnbull with Chinese President Xi Jinping before sitting down for a bilateral meeting at an official guesthouse in Hangzhou, China. Picture: Lyndon Mechielsen/News Corp.

CHINA has called on Prime Minister Malcolm Turnbull to maintain a fair and predictable investment environment after Chinese investors were knocked back from multi-billion dollar deals.

It is understood Chinese President Xi Jinping raised the issue of investing in Australia with Mr Turnbull in a meeting on the sidelines of the G20 summit.

Mr Turnbull told Mr Xi that Australia was an open economy and it is understood that Ausgrid was not specifically mentioned; however China’s Foreign Ministry later said Mr Xi had told Mr Turnbull that he “hopes the Australian side continues to dedicate itself to providing

foreign investors a fair, transparent and predictable policy environment”.

“This also accords with Australia’s own interests,” Mr Xi reportedly said.

The shock rejection of China State Grid Corporation and Hong Kong-based Cheung Kong Infrastructure bids for the NSW electricity network on national security grounds has left the $10 billion sale in limbo.

Earlier Mr Turnbull after his meeting with Mr Xi said that China had more freedom to invest in Australia than the other way around.

In Hangzhou today the pair avoided the specifics of the blocked sales of Ausgrid and the Kidman property empire but talked about foreign investment and free trade.

Mr Turnbull insists the relationship between the two countries is getting “stronger and stronger” although there have been angry mutterings from the Asian superpower about the Government’s decisions not to let Chinese companies buy the two large pieces of infrastructure.

“China understands as well if not better than anyone our sovereign right to determine who invests in Australia and the terms on which they invest,” Mr Turnbull said.

“We mostly say yes; we almost invariably say yes, but from time to time we say no.”

Mr Turnbull is walking a fine line strongly attacking protectionism while protecting Australian assets, but argues that there is a difference between free trade and national security issues.

He also declared everything being done at the G20 economic forum was “about family”, continuing the Government’s theme that fixing the budget and boosting economic growth is a moral challenge.

“It’s about ensuring our children, our grandchildren in every country have the opportunities to realise their dreams,” he said.

He and President Xi tackled the sticky subject of the South China Sea territorial dispute with Mr Turnbull saying Australia’s position — that it be settled peacefully and legally — was “well understood” by China.

Prime Minister Malcolm Turnbull met with business leaders from around the world at the B20 meetings. Picture: Lyndon Mechielsen / News Corp Australia

The Prime Minister landed in Hangzhou, China, this morning for the G20 meetings after a messy week in Canberra. He was fortunate to avoid the sort of kerfuffle that US President Barack Obama faced — first, the Chinese did not have the right stairs for his plane, then there was a standoff between officials from both sides and journalists.

After meeting the Chinese President to talk about economic reform, Mr Turnbull met with business leaders from around the world at the B20 meetings.

He named “public trust” in reform and trade as crucial to avoid protectionist policies that would be “a mistake of historic proportions”.

Powerful members of the new Senate including the four One Nation Senators and the three Nick Xenophon Team members have been vocally critical about opening up trade further.

“The rise of populism in many nations, and indeed for calls for protectionism ... that is a road we cannot afford to go down. It would be a mistake of historic proportions,” Mr Turnbull told the crowd of chief executive officers.

“We can’t afford to go into reverse on that.”

He introduced hundreds of leaders to the phrase “you can’t afford to hide under the doona” by ignoring looming economic challenges and said it was important to ensure that businesses were paying their fair share of taxes in order to rebuild public trust.