Australia Rejects Bids From Chinese Investors for Electricity Provider
HONG KONG — Citing national security concerns, the Australian government on Thursday rejected competing bids from Hong Kong and mainland Chinese groups for control of a company that supplies electricity to Sydney and neighboring areas.
Key sectors of Australia’s economy, like mining and agriculture, rely heavily on Chinese demand. But local wariness toward China’s growing economic influence has risen in recent years amid a wave of Chinese takeovers of Australian businesses.
At the same time, an influx of wealthy buyers from China has helped push up real estate prices in urban centers like Sydney and Melbourne, pricing local residents out of the market.
In response, the Australian government, in accordance with its foreign investment review legislation, has been carefully vetting the sale of key assets to Chinese interests and has blocked several high-profile transactions. Officials have also ordered Chinese buyers to sell homes acquired in violation of Australia’s restrictions on foreign investment in real estate.
In the latest such action, the Australian treasurer, Scott Morrison, on Thursday rejected the bids for 50.4 percent of Ausgrid, an electricity provider with a 99-year lease to distribute power in the southeastern state of New South Wales.
Mr. Morrison did not name the bidders, but news reports in Australia last month widely identified them as Cheung Kong Infrastructure, controlled by the family of the Hong Kong billionaire Li Ka-shing; and the State Grid Corporation of China, a government-owned electricity transmission and distribution company that is China’s biggest.
莫里森没有对相关竞标企业指名道姓，但上个月，许多澳洲媒体都曾认定，它们分别是由香港亿万富翁李嘉诚家族控制的长江基建(Cheung Kong Infrastructure，简称CKI)，以及国有的中国最大电力输送和分销企业国家电网。
“My preliminary view is that the foreign investment proposals put to me for this transaction are contrary to the national interest,” Mr. Morrison said in a news release. “National security issues were identified in critical power and communications services that Ausgrid provides to businesses and governments.”
Mr. Morrison also emphasized the importance of foreign investment to Australia’s economy and, in separate comments to reporters on Thursday, said that the nationality of the bidders was not a factor in his decision, which focused more on the specifics of the proposed deals.
“The national security concerns were not country-specific and relate to the transaction structure and the nature of the assets,” he said.
He said the bidders have until next Thursday to argue their cases before he makes a final ruling on the matter.
Representatives of State Grid did not immediately respond to requests for comment.
Cheung Kong Infrastructure noted that it had been operating power, water and gas networks in the United Kingdom, Australia and New Zealand for 25 years.
“We believe that the Australian government must have reasons beyond the obvious which led them to make today’s announcement,” the company said in a news release. “The issue is unrelated to CKI.”
Ausgrid’s coverage area includes Sydney, Australia’s biggest city, and covers more than 22,000 square kilometers, or about 8,500 square miles — an area roughly the size of New Jersey.
Australian news reports had estimated a sale of the Ausgrid stake could have brought in more than 10 billion Australian dollars, or $7.7 billion, to the state government of New South Wales.
Both of the bidders are already significant investors in the Australian electricity market. State Grid has stakes in three local power companies, while Cheung Kong Infrastructure owns electricity and gas distribution networks in several Australian states.
Local business groups in Australia had lobbied for a more welcoming approach to the bids from China. They pointed out that the United States remains the country’s biggest foreign investor, with Chinese investment in Australia to date amounting to only one tenth of what America has spent.
Australia has blocked several high-profile deals involving buyers from China in recent years.
Last year, Australia’s treasurer at the time, Joe Hockey, ordered the head of Evergrande Real Estate Group, a Chinese developer, to sell a mansion he had acquired illegally in 2014 for 39 million dollars.
In April, Mr. Morrison signaled his opposition to the acquisition of a cattle ranching company by a Chinese-led group. He cited the significant size of the firm’s sprawling ranchland, which covered 1 percent of Australia’s total area and 2 percent of its agricultural land.
Even some Chinese investments that went through have stirred up controversy. Concerns arose in October that an agreement by a Chinese company to acquire the port of Darwin, in Australia’s Northern Territory, could open the door to spying on United States Marines, who train there several months of the year.