Fair treatment required for Chinese bidders involved in Australian energy deals

By Hu Weijia Source:Global Times Published: 2017/12/11 21:18:39

A bidding war has developed for Sydney-based natural gas explorer AWE after Australian Mineral Resources made an all-share takeover offer, Bloomberg News reported on Monday, following a A$463 million ($348 million) cash bid by a Chinese energy corporation.

Observers are concerned about whether China's national identity will impede State-owned China Energy Reserve and Chemicals Group (CERCG) from getting fair treatment amid the bidding war. The purchase of massive strategic assets remains a sensitive topic in Australia, an important destination for Chinese energy investment. In 2016, Australia blocked State Grid Corp of China from taking a majority stake in its state-owned power network Ausgrid, citing security concerns. Australian Prime Minister Malcolm Turnbull was quoted by the Guardian on Friday as saying that Australia will "stand up" to China as a foreign influence row heats up. It is natural to wonder whether energy acquisition deals can be implemented smoothly at a time when anti-Chinese sentiment is on the rise.

Australia, the world's second-largest exporter of liquefied natural gas (LNG),might overtake Qatar as the world's largest exporter by 2019. As for China, the switch from coal to gas has boosted China's gas consumption and therefore created vast opportunities for cooperation and collaboration.

Chinese companies will likely step up investment in Australia's energy sector, but if Australia holds a suspicious attitude toward Chinese State-owned enterprises, opportunities for cooperation cannot be seized. Instead, they may cause sharp conflicts between China and Australia. Chinese companies should have equal status with domestic Australian companies in bidding wars. This requires China and Australia to intensify cooperation to better supervise energy acquisition deals and build mutual trust. The Chinese government has always required Chinese companies to abide by local rules overseas. Normal business takeovers need to follow business rules and the laws of the market, instead of political interests.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON THE ECONOMY

blog comments powered by Disqus