Australia Says No Such Thing as Private Chinese Company, Will Guard National Interest

January 17, 2019 Updated: January 17, 2019

Australia’s foreign investment regulator, the Foreign Investment Review Board (FIRB), intends to increase scrutiny of Chinese private companies looking to buy Australian assets according to media reports.

The move comes after the FIRB no longer regarded private Chinese companies as free from Chinese Communist Party (CCP) control. Recently passed legislation in China has made it compulsory for China-based companies to surrender information to the communist state on request, even for those operating abroad.

China’s National Security Law, also called the National Intelligence Law, took effect in June 2017 and amended in April the following year.

A senior figure who has direct knowledge of the reasoning behind the FIRB board’s decision said China’s National Security Law had “done away with the distinction between private and state-owned companies.”

“The Chinese have done their private companies a great disservice,” the source told the Australian Financial Review (AFR). “Chinese companies will do as they are told.”

The China-Australia Free Trade Agreement, which took effect in Dec. 2015, confirms transactions of up to $1.15 billion for “non-sensitive sectors” and $255 million in “sensitive sectors” via private companies can advance without FIRB approval.

However, recent media reports suggest FIRB will make changes to treat all Chinese private companies as though they are state-owned.

The Australian government’s website states that FIRB “continues to screen all direct investments, new business proposals, and acquisitions of interests in land (including agricultural land) by Chinese state-owned enterprises, regardless of [the] transaction size.”

Treasurer Josh Frydenberg, who is responsible for FIRB, said Australia welcomes foreign investment but will continue to guard the national interest.

“This framework is not discriminatory against any investor or country, with every foreign investment proposal considered on its merits,” he told the AFR.

In Nov., Frydenberg announced he would block Hong Kong-based firm CK Group’s $13 billion acquisition of APA Group because it would be “contrary to the national interest.” APA Group owns 15,000 km (9320 miles) or 56 percent of natural gas pipelines in Australia. Frydenberg said it would result in an “undue concentration of foreign ownership by a single company group in our most significant gas transmission business.”

Cyber Hacking Concerns

FIRB’s new approach to China-based companies comes amid recent news China’s Jangho Group attempted to acquire Healius, formerly known as Primary Health Care—one of Australia’s largest owners of medical and pathology centres. Healius holds sensitive medical records for millions of Australians in more than 2,500 locations across the country.

Clive Hamilton, professor of public ethics at Charles Sturt University in Canberra and author of Silent Invasion: China’s influence in Australia, expressed his concern over the acquisition bid in an opinion editorial, saying: “Chinese companies are required by law to obey directives from Beijing’s intelligence agencies. So why would our regulators permit a giant Australian healthcare provider that is privy to highly sensitive records on hundreds of thousands of Australians to be acquired by a Chinese company?”

“The specific risk of giving Chinese companies direct access to Australian medical records is that China’s intelligence services could access those records for information on current or future political, military, and public service leaders in order to blackmail them.”

In Dec. 2018 Australia joined the United States, New Zealand, Canada, and the United Kingdom in slamming a hacking group backed by the Chinese regime for stealing commercial intellectual property from companies and government agencies in more than 12 countries around the world.

“The Australian government joins other international partners in expressing serious concern about a global campaign of cyber-enabled commercial intellectual property theft by a group known as APT10, acting on behalf of the Chinese Ministry of State Security,” Foreign Minister Marise Payne and Home Affairs Minister Peter Dutton said in a joint statement.

Huawei Under Criminal Investigation

The Wall Street Journal reported on Jan. 16 U.S. federal prosecutors are pursuing a criminal investigation into Huawei, a Chinese private company, for allegedly stealing trade secrets from U.S. businesses, including T-Mobile US Inc.

Canada’s Dec. 1 arrest of Huawei chief financial officer Meng Wanzhou in Vancouver on request of the United States drew attention to China’s amended National Security Law, which states in article 14 that any organization or citizen must “supply the necessary support, assistance, and cooperation.”

Even without any direct relationship with the Ministry of State Security (MSS), which is the CCP’s main intelligence and security agency, the National Security Law now requires all Chinese citizens and entities to supply intelligence information on request.

Although there’s no official report or public evidence to show a relationship between Meng Wanzhou and the MSS, many scholars and commentators suspect Meng is an MSS member. Huawei itself is linked to both the Chinese military via its founder, Ren Zhengfei, and the MSS via its chairwoman, Sun Yafang, since 1999.

Since late August 2018, China’s main telecoms Huawei and ZTE have been blocked from supplying equipment for Australia’s planned 5G cellular networks due to security concerns.

While the Australian government did not directly name the companies, it said the “involvement of vendors, who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorised access or interference.”

Epoch Times’ Nicole Hao contributed to this report.

From NTD News

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