A new FIRB regime to keep the national security hawks caged
By James Laurenceson
Note: This article appeared in the Australian Financial Review, August 25 2016.
Last week Treasurer Scott Morrison officially killed off the prospect of foreign investors taking a 50.4 per cent share of the lease to operate NSW electricity distributor Ausgrid, citing national security risks.
The Ausgrid decision: new questions
Bids by China’s State Grid for electricity distribution assets in South Australia (2012) and Victoria (2013) were approved on the basis that they were in the national interest. On Thursday Treasurer Scott Morrison blocked State Grid’s bid, along with that of Cheung Kong Infrastructure’s, for NSW electricity distributor Ausgrid. He said it was his preliminary view the deal was contrary to the national interest on the grounds of national security. On Friday the Treasurer said that Ausgrid’s assets and the structure of the deal was different to previous cases.
Chinese investment and Ausgrid
A decision by Australian Treasurer Scott Morrison on whether to approve the partial sale of NSW electricity distributor, Ausgrid, is expected shortly.
1. In March only three companies made the shortlist to buy a 50.4 percent share of NSW electricity distributor Ausgrid. All were Chinese. Since then one has dropped out leaving State Grid, a Chinese state-owned company, and Cheung Kong Infrastructure, a Chinese privately-owned company, as the only bidders.
Chinese investment: Stay calm and ignore the defence hawks
By James Laurenceson
Note: This article originally appeared in the Lowy Interpreter, July 28 2016.
The lights are still on in Manila.
That must come as quite a surprise to defence hawks who like to beat the drum that the sale of New South Wales electricity distributor Ausgrid to a Chinese company could compromise our national security and be contrary to the national interest.
Working Paper: China’s debt challenge: stylised facts, drivers and policy implications
This paper begins by showing that even after conditioning for factors that might justifiably lead to a country having relatively high leverage, China remains a debt outlier. In this sense China can be regarded as over-leveraged and its debt may present a potential risk to growth and financial stability. The corporate sector is central to China’s debt story, accounting for two-thirds of the total. The corporate sector has also been mostly responsible for China’s leverage cycles, including the leveraging up since 2008 and an earlier deleveraging phase starting in 2003.
BREXIT and the Australia-China Economic Relationship
1. In 2015 the value of Australia’s goods and services exports to the UK stood at $8.8bn and $23.5bn to the EU as a whole. This compares with $91.3bn to China.
2. Over the past decade the value of Australia’s goods and services exports to the UK fell by $0.6bn, while they increased by $0.4bn to the EU as a whole. This compares with an increase of $71.1bn to China.
Don't believe Chinese worker Free Trade Agreement scaremongering
The Queensland-China Economic Relationship
- $8.1 billion to Japan
- $6.0 billion to Korea
- $5.3 billion to India
2. The annual value of Queensland’s goods exports to China has increased by $4.9 billion over the past five years. Exports to –
- Japan fell by $3.2 billion
- Korea increased by $0.1 billion
GROWING PAINS OF THE CHINESE RENMINBI
Few have the insight into the Chinese economy of Dr Guonan Ma. Educated in China and the US, Dr Ma is currently a Visiting Fellow at the Australia-China Relations Institute at UTS and a non-resident scholar at Bruegel, an economic think tank based in Belgium. Dr Ma served as senior economist at the Representative Office for Asia and the Pacific of the Bank for International Settlements for 14 years. Prior to this he was Chief North Asia Economist for investment banks Merrill Lynch, Citigroup and Bankers Trust.