The Australian government hit back at criticism of Chinese investment in its economy by opposition leader Tony Abbott, condemning his remarks as “dangerously dumb” yesterday.
Abbott, who is strongly favored to become Australia’s next prime minister according to opinion polls, described Chinese business ownership this week as a “complicated” issue because of the prevalence of state-owned companies.
He said it was “rarely” in Australia’s interest to allow acquisitions by foreign governments, triggering anger from the center-left Labor government, which stressed the importance of China, the country’s top trading partner.
Australian Prime Minister Julia Gillard said the remarks, made during a speech in Beijing this week, had “put at risk our economic security.”
“What he’s been saying over there in China is basically something that would jeopardize Australia’s economic growth and the strength of our economy,” she told Australian Broadcasting Corp radio.
Australian Foreign Minister Bob Carr said the comments “can only be seen, and will be seen by them I think, as an adversarial approach with China, and I think that is reckless.”
“I think it is really dangerously dumb for this country’s interests,” he said.
China is Australia’s top export market and its top source of imports, with bilateral trade reaching A$113.7 billion (US$117.5 billion) last year, 23.2 percent of Australia’s total.
Carr said Abbott had indicated that he favored a “blanket prohibition on Chinese investment by state-owned companies,” which he described as “crazy” given the potential benefits for Australia of the Asian giant’s economic boom.
“You’ve got farm communities of Australia that are guaranteed prosperity because Chinese urbanization is seeing people buy their foodstuff from supermarkets stocked with Australian produce,” Carr said. “You’ve got 5,000 mining jobs in Australia directly dependent on Chinese investment.”
China currently gets half its iron ore from Australia, with firms “encouraged” by the fact that they could buy shares in the mines themselves, he added.
Australian Treasurer Wayne Swan had earlier condemned Abbott for casting Australia’s foreign investment guidelines into question for the sake of politicking, describing the speech as “unhelpful” and saying it generated uncertainty.
Australia has emerged recession-free from the global financial crisis, helped by huge Chinese demand for its natural resources, but Chinese takeover moves on industries from telecoms to mining to agriculture have caused unease.