The safeguards that were placed nearly a year ago to stop opportunistic Chinese companies from finding their footing in Australia seems to be paying dividends now. According to news reports, The Australian Financial Review Board on Tuesday blocked a Chinese construction company named ‘China State Construction Engineering Corp’ from buying out a domestic builder company named ‘Probuild’ involved in several high-profile projects, citing national security concerns.
It is important to note that the majority owner of Probuild is South Africa based civil engineering and building contracting company named Wilson Bayly Holmes-Ovcon Ltd (WBHO) and China State Construction Engineering Corp was planning to pay A$300 million ($231 million) for WBHO’s 88 per cent stake in Probuild.
However, as soon as the news of Australia’s foreign takeover regulator’s decision of rejecting the deal “on the grounds of national security” reached the Chinese company, it pulled the plug on the entire contract to save its face.
Reported by TFI previously, Australia had changed its foreign investment rules which gives greater approval powers to the Foreign Investment Review Board (FIRB) to curtail opportunistic takeovers of struggling businesses amid increasing national security risk.
Under the new plan, FIRB has the authority to approve all investments related to “sensitive national security business”, regardless of the value of the deal. The sensitive national security business is a direct reference to the Chinese that tried leveraging its might in the Australian market to its own benefit and bend Australia according to its wishes.
China used to circumvent a weak FIRB earlier when the stringent rules were not set in place and as a result, Beijing had gained significant clout amid the Australian society by buying one local company after another.
Probuild is not the only company to be saved by the fangs of an opportunistic China. Since the change in laws, Australia has stopped China Mengniu Dairy Co from buying domestic dairy producer Lion-Dairy and Drinks Pty Ltd from Japan’s Kirin Holdings Co, leaving the path clear for Australia-listed Bega Cheese to buy it.
Reported extensively by TFI, Australia’s fightback against China started in the aftermath of COVID-19 when Scott Morisson started calling out for an international inquiry against Beijing and its alleged role in the spread of Coronavirus.
The Xi Jinping regime tried its best to quash the rebellion of Australia but the Aussie PM stuck to his guns and instead of mollycoddling China, stood his ground, and ultimately countries around the world started rallying in support of Australia.
Since then, the Australian PM is not taking any punches sitting down. On the contrary, he is undoing the mistakes of his predecessors by repeatedly landing punches on the paper dragon. Using a firm iron-fist while dealing with China has been Morisson’s foreign policy template, and so far, he has managed to give Jinping and his Politburo, a run for their money.