Albanese seeks to reassure China on east coast gas plans

Despite Beijing's complaints, Prime Minister Anthony Albanese has stated that he will not weaken the regulations governing foreign investment. However, he has guaranteed Chinese gas companies that supply contracts will not be terminated if the government creates an east coast gas reservation.

When the prime minister met with senior Chinese leaders, including President Xi Jinping, in Beijing on Tuesday, Chinese concerns about a possible danger to liquefied natural gas supplies echoed those of the Japanese government and industry on the proposed gas reservation.

Premier Li Qiang chastised Albanese for the stringent government scrutiny of Chinese bids to acquire important Australian assets and companies in front of a group of people that included executives from Australia's largest companies, whose fortunes are linked to China. He stated that both nations should strive for non-discriminatory business environments.

Through an interpreter, Li stated at the Australia-China CEO Roundtable, which was co-hosted by the Business Council of Australia, "I trust that Australia will also treat Chinese enterprises fairly and also properly resolve issues in terms of market access and investment review."

Australia's foreign investment policy was defended by Albanese. "When it comes to foreign investment, we have a case-by-case issue," he stated.

"It is viewed based on an objective assessment of our national interest rather than on the interests of any one nation."

Speaking on condition of anonymity, a participant at the roundtable stated that the chair of China's third-largest gas company, the China National Offshore Oil Corporation, a stakeholder in Woodside's North West Shelf project, expressed the company's hope that market access and regulation for the gas industry would be discussed as part of the review of the China-Australia free-trade agreement.

Amid concerns about supply shortages, the federal government last month launched a review of domestic gas regulation, which paved the way for the creation of an East Coast reservation that would compel producers to quarantine a certain quantity for local consumers, thereby lowering costs.

Asian clients who have committed to long-term, low-cost supply are alarmed by the change. Japan, which was once Australia's most reliable LNG customer, has expressed its dissatisfaction with what it perceives to be unpredictable and politically motivated changes to energy policy. It cites slow project approvals, retroactive royalty hikes, and inconsistent federal messaging on gas as warning signs for future investment.

China is voicing similar complaints. China is growing increasingly concerned about Australia's labor reliability and regulatory environment as a result of billions of dollars being invested in gas infrastructure and Beijing's energy planners navigating a time of growth that requires a lot of power.

Albanese, who visited the Great Wall of China on Wednesday, stated that the government was prepared to investigate industry concerns on the impact of gas contracts.

The idea that current LNG contracts are affected is one of the points brought up yesterday, and we will investigate. Whether it's for China, Japan, or the Republic of Korea, we don't meddle in those sovereign matters when it comes to gas," he stated.

Following Albanese's promise at the most recent election to restore the Port of Darwin to Australian control, the Global Times, a nationalist newspaper connected to the Communist Party, stated on Wednesday that the port also loomed as a concern for the relationship.

Under a 2015 arrangement, the port is leased for 99 years to Landbridge, a Chinese-owned infrastructure company.

In a barely disguised allusion to the Trump administration's mounting pressure on US allies, the Global Times also cautioned against any "third-party interference" that would sabotage Australia and China's growing relationship.

Given that the Labor government is under pressure from the US to increase defense spending, partly in response to China's military assertiveness in the region, the daily cautioned Albanese against "pan-securitizing" foreign policy.

According to the newspaper's editorial, "specific issues between China and Australia, such as the lease of Darwin Port and the expansion of the China-Australia Free Trade Agreement, need to be discussed at this time."

Practical challenges also exist, including the inclinations toward "pan-politicization" and "pan-securitization," as well as outside intervention.

Concerns over FIRB scrutiny discourage Chinese investors

Albanese downplayed concerns made in Chinese state media that Beijing might respond if he proceeded with divestment, claiming that neither Li nor Xi brought up his pledge to restore Darwin Port.

The FIRB now scrutinizes "high-risk" applications more closely, such as when a foreign investor controls or can control a supply chain or is attempting to invest in delicate sectors like vital infrastructure, vital minerals, or data.

The modifications, according to lawyers and bankers who supervise foreign buyouts, are discouraging Chinese investors. According to a survey by Sydney University and KPMG, Chinese foreign investment in Australia was only $1.3 billion last year, the third-lowest amount since 2006. Only 2021 and 2023 had lower levels of investment.

Australia. Although it wasn't the most urgent topic at Tuesday's roundtable, David Olsson, head of the China Business Council, stated that he was certain that some Chinese businessmen would want to see an easier route to investment in Australia.

As we do when investing in China, he said, "It appears that the Chinese side has a far better understanding of Australia's focus on investments not being contrary to our national interests and that is being factored into their assessments."

During Albanese's visit to Beijing, Chinese and Australian officials signed six agreements. The most noteworthy was a memorandum of intent to examine the free trade agreement between Australia and China to commemorate its tenth anniversary of implementation.

After completing their work in 2026, bureaucrats from both nations will investigate ways to enhance or broaden the agreement, such as lowering additional trade restrictions or facilitating market access.

In order to market Australian vacation destinations to Chinese tourists, two agreements pertaining to tourism were signed, one of which was a "strategic co-operation agreement" between Tourism Australia and China Media Group.

The two nations inked two agreements on biosecurity procedures for fruit exportation that addressed topics including insect control and packing.

Due to their lack of fruit flies, only Tasmanian apples are currently allowed for sale in China.

To expedite commerce, a final agreement refers to paperless certification for food exports to China.

The prime minister took a plane from Beijing to Chengdu, China's panda capital, a 21 million-person city in the southwest.

As part of the Australian Open, he assisted in announcing that Tennis Australia would continue to stage a wildcard playoff competition in the city. In China, tennis is a very popular sport.

Additionally, Albanese spoke with Wang Xiaohu, the local leader of the Chinese Communist Party, as is now routine, and informed him of his desire to visit western China in order to establish connections around the nation.

On Thursday, the PM will go to a panda breeding facility. Although Australia has a consulate in Chengdu, the last Australian prime minister to visit was Bob Hawke in 1986.