Business Leaders Forum: China stance risks foreign investment

Ryan Stokes says Australia is taking an unfairly “prejudicial” view ­towards deals by Chinese companies.

Media scion Ryan Stokes says Australia is sending contradictory messages to potential foreign investors in our economy by taking an unfairly “prejudicial’’ view ­towards deals being proposed by Chinese companies.

As Treasurer Scott Morrison considers a $370 million bid by a Chinese company that has now partnered with an Australian firm to purchase the iconic Kidman cattle station empire, Mr Stokes said the heavy scrutiny of Chinese investment could threaten the spending plans of other firms looking to invest in Australia.

He said foreign companies had invested elsewhere in the local cattle industry and “nobody asks a question.’’

‘’Because they aren’t Chinese there isn’t the same attention. I think this is a really concerning factor. If I was a firm looking to invest in Australia, it would probably change your viewpoint,’’ Mr Stokes told The Australian and Deutsche Bank’s Business Leaders Forum in Perth yesterday.

“We have a contradiction at times. We are open, we want foreign investment, we call for it. But we question it and we scrutinise it when it comes from a source we are not happy with.

“So I think we have got to be very clear. That investment is constructive, they can’t take the resource away, they still need to farm the land, get the produce and take it through to market.

“We seem to be fixated on that question. The fact we are tells us ultimately we do have a degree of prejudicial assessment of a Chinese transaction.’’

The Australian revealed this week that Australian Rural Capital, backed by agribusiness and investment heavyweights James Jackson and Stephen Chapman, had partnered Chinese firm Shanghai Pengxin in bidding for the Kidman empire.

An initial offer by Shanghai Pengxin, which is backed by Chinese property billionaire Jiang Zhaobai, was rebuffed by the Foreign Investment Review Board late last year.

It has since made a revised, ­reduced offer that does not ­include the Anna Creek station on the sensitive Woomera military area in South Australia.

Mr Stokes’s comments follow the backlash against the recent sale of the Van Diemen’s Land Tasmanian dairy company to Chinese company Moon Lake Investments, which was approved by the Treasurer a fortnight ago after it was given the green light by FIRB.

At the time, Bill Shorten declared that Australians deserved “a straight answer” over whether Kathmandu founder Jan Cameron’s rival bid for the business was unfairly passed over.

The storm prompted Bega Cheese executive chairman Barry Irvin to warn that the FIRB was being unfairly used as a “xenophobic weapon’’ to delay or halt Chinese investment in Australia’s agricultural sector.

NBN and Perth Airport director Shirley In’t Veld told the Business Leaders’ forum that the public needed to be better educated about the benefits of foreign ­direct investment from China.

The forum also heard of a ­consensus among the speakers and panellists — which included Finance Minister Mathias ­Cormann and Robert Rankin, the chairman of the James Packer-backed Crown Resorts — for a move to four-year federal ­parliamentary terms.

Mr Rankin said while such a change would require a referendum and would be difficult, he hoped it would receive bipartisan support.

“Maybe post the next election, the government of the day will take up that challenge and have a go at it,’’ he said.

“There should be a real call to arms on both sides of politics in the national interest to try and give a bit more time so the cycles are longer and the planning can be a little bit more longer term.’’

Mr Stokes also expressed concern that one of the unintended consequences of the Chinese government’s crackdown on corruption could be a reduced willingness by officials to take risks and undertake bold economic initiatives.

Seven Group’s Westrac business has the lucrative Caterpillar earthmoving franchise in China.

Mr Stokes said before the crackdown and when the Chinese economy was in a rapid growth stage, officials talked of “bold plans, major bold steps and investments in growth’’.

“That dynamic has changed. There isn’t the same desire to draw attention to the major things they have done,’’ he said.

“It is one of the issues you are starting to see as a consequence (of the corruption crackdown).”