China warns "protectionist" Australia after it blocks investment in energy grid

Jessica Morris
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China has also warned over its trade relationship with the UK (Source: Getty)

Beijing warned over its future willingness to invest in Australia, after two Chinese firms were prevented from taking a controlling stake in its largest energy network.

State Grid Corporation, which is a Chinese state-backed firm, and billionaire Li Ka-shing's Hong Kong-based Cheung Kong Infrastructure had submitted bids of more than A$10bn (£5.94bn) for a 50.4 per cent stake in Ausgrid.

However, the bids were blocked by the Australian government after a review found "national security" concerns.

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China Commerce Ministry spokesman, Shen Danyang, said today: "This kind of decision is protectionist and seriously impacts the willingness of Chinese companies to invest in Australia.

"China hopes Australia will create a fairer and more transparent environment for Chinese investment."

Ausgrid supplies power to 1.6m households in the New South Wales territory.

A review found "national security issues" regarding the critical power and communications services Ausgrid provides. The government also stopped the sale of an Australian agriculture empire to a group of Chinese investors earlier this year.

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Australian Treasurer Scott Morrison had said: "I am, of course, open to consider what the bidders [for Ausgrid] put to me, but at this stage no suitable mitigations have been identified that would, for the proposed transaction structure, appropriately address the identified risks."

Beijing issued a similar warning to the UK after a delay at the 11th hour to its decision on the Hinkley Point C nuclear power plant.

Prime Minister Theresa May is conducting a review amid security concerns stemming from Chinese investment, as well as the project's huge costs.

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