Re: Coronavirus (Covid19)
Posted: Mon Mar 30, 2020 8:11 amCHINA SPREE SPARKS FIRB CRACKDOWN
The federal government has placed severe, immediate and indefinite restrictions on all foreign investment bids following at least two cases of Chinese-owned companies in Australia securing tonnes of precious medical supplies and shipping them back to China.
Effective from 10.30pm Sunday, Treasurer Josh Frydenberg lowered to zero the dollar value of every foreign investment bid that would trigger scrutiny by the Foreign Investment Review Board and then, ultimately, by him.
Presently, there are varying foreign investment thresholds depending on the buyer, the country in which they are based, and the type of asset being sought. Thresholds range from $1.192 billion to $275 million to zero.
Under the change, the threshold is zero for everything, meaning all bids will have to be weighed against the national interest.
As well as protecting distressed Australian businesses and assets from fire sale takeovers, the crackdown was sparked after two Chinese-owned property developers, Greenland Australia and Risland Australia, had staff secure more than 100 tonnes of equipment and ship it back home.
Risland’s CEO Dr Guotao Hu standing in front of bulk supplies of protective clothing bound for China.
Greenland employees sourced bulk supplies of surgical masks, thermometers, antibacterial wipes, hand sanitiser, gloves and Panadol in January and February as the coronavirus took hold in its point of origin, Wuhan, and spread throughout China.
On the weekend, the The Sydney Morning Herald reported that Risland flew 82 tonnes of supplies on a corporate jet to Wuhan in late February.
"The chartered plane with 90 tons (82 tonnes) of medical supplies, including 100,000 most needed protective coveralls and 900,000 pairs of medical gloves, has successfully departed from Sydney and arrived in Wuhan on 24 Feb," Risland Australia posted on its LinkedIn page.
Mr Frydenberg said the foreign investment crackdown would last until the coronavirus crisis had passed.
"This is not an investment freeze. Australia is open for business and recognises investment at this time can be beneficial if in the national interest,'' he said in a statement.
"However, these measures are necessary to safeguard the national interest as the coronavirus outbreak puts intense pressure on the Australian economy and Australian businesses.
"These are temporary measures that will remain in place for the duration of the current crisis.
"Where appropriate, conditions will be applied proportionately to address identified risks on a non-discriminatory basis.''
Before the ban was imposed, the threshold for any bid on any asset by a state-owned entity was zero.
Private investors from a country with which Australia has a free trade agreement faced no FIRB scrutiny on bids for non-sensitive businesses valued up to $1.192 billion, and on sensitive assets worth up to $275 million.
Other private investors face FIRB scrutiny on all bids for businesses valued over $275 million. There is a zero threshold for all media acquisitions and different rules again for bids on land and agribusinesses.
For example, private investors from non-FTA countries face a $15 million threshhold on agricultural land, $275 million for developed commercial land and $60 million for sensitive land.
Thresholds on agricultural land and developed commercial land for private investors from FTA countries is $1.192 billion.
The time frame for existing and new applications from foreign investors bids will increase from 30 days to six months.
PM speaks up for Pacific
The potential for China to exploit the crisis is also causing strategic concerns for Australia.
Prime Minister Scott Morrison appealed to fellow Group of 20 leaders during last week's emergency video hook-up to be mindful of Australia's Pacific neighbours when it came to assisting developing nations.
With some 80 nations already appealing to the International Monetary Fund for assistance, the G20 canvassed the prospect of nations collapsing under the economic and health strains of the crisis.
Australia, whose own resources are severely depleted, fears China could use the chaos to extend its influence.
"I explained to G20 leaders that our Pacific island family must be a focus of international support,'' Mr Morrison said after the meeting.
"There has never been a more important time for Australia’s Pacific Step-up as we all face these massive challenges.
"Since January, Australia has provided support for laboratories and public information campaigns, medical equipment, health expertise and for the WHO’s regional preparedness plan.
"We are reconfiguring our development assistance to ensure critical health services can continue to function and to help our Pacific neighbours and Timor-Leste to manage the immediate economic impacts of the pandemic."
The federal government has placed severe, immediate and indefinite restrictions on all foreign investment bids following at least two cases of Chinese-owned companies in Australia securing tonnes of precious medical supplies and shipping them back to China.
Effective from 10.30pm Sunday, Treasurer Josh Frydenberg lowered to zero the dollar value of every foreign investment bid that would trigger scrutiny by the Foreign Investment Review Board and then, ultimately, by him.
Presently, there are varying foreign investment thresholds depending on the buyer, the country in which they are based, and the type of asset being sought. Thresholds range from $1.192 billion to $275 million to zero.
Under the change, the threshold is zero for everything, meaning all bids will have to be weighed against the national interest.
As well as protecting distressed Australian businesses and assets from fire sale takeovers, the crackdown was sparked after two Chinese-owned property developers, Greenland Australia and Risland Australia, had staff secure more than 100 tonnes of equipment and ship it back home.
Risland’s CEO Dr Guotao Hu standing in front of bulk supplies of protective clothing bound for China.
Greenland employees sourced bulk supplies of surgical masks, thermometers, antibacterial wipes, hand sanitiser, gloves and Panadol in January and February as the coronavirus took hold in its point of origin, Wuhan, and spread throughout China.
On the weekend, the The Sydney Morning Herald reported that Risland flew 82 tonnes of supplies on a corporate jet to Wuhan in late February.
"The chartered plane with 90 tons (82 tonnes) of medical supplies, including 100,000 most needed protective coveralls and 900,000 pairs of medical gloves, has successfully departed from Sydney and arrived in Wuhan on 24 Feb," Risland Australia posted on its LinkedIn page.
Mr Frydenberg said the foreign investment crackdown would last until the coronavirus crisis had passed.
"This is not an investment freeze. Australia is open for business and recognises investment at this time can be beneficial if in the national interest,'' he said in a statement.
"However, these measures are necessary to safeguard the national interest as the coronavirus outbreak puts intense pressure on the Australian economy and Australian businesses.
"These are temporary measures that will remain in place for the duration of the current crisis.
"Where appropriate, conditions will be applied proportionately to address identified risks on a non-discriminatory basis.''
Before the ban was imposed, the threshold for any bid on any asset by a state-owned entity was zero.
Private investors from a country with which Australia has a free trade agreement faced no FIRB scrutiny on bids for non-sensitive businesses valued up to $1.192 billion, and on sensitive assets worth up to $275 million.
Other private investors face FIRB scrutiny on all bids for businesses valued over $275 million. There is a zero threshold for all media acquisitions and different rules again for bids on land and agribusinesses.
For example, private investors from non-FTA countries face a $15 million threshhold on agricultural land, $275 million for developed commercial land and $60 million for sensitive land.
Thresholds on agricultural land and developed commercial land for private investors from FTA countries is $1.192 billion.
The time frame for existing and new applications from foreign investors bids will increase from 30 days to six months.
PM speaks up for Pacific
The potential for China to exploit the crisis is also causing strategic concerns for Australia.
Prime Minister Scott Morrison appealed to fellow Group of 20 leaders during last week's emergency video hook-up to be mindful of Australia's Pacific neighbours when it came to assisting developing nations.
With some 80 nations already appealing to the International Monetary Fund for assistance, the G20 canvassed the prospect of nations collapsing under the economic and health strains of the crisis.
Australia, whose own resources are severely depleted, fears China could use the chaos to extend its influence.
"I explained to G20 leaders that our Pacific island family must be a focus of international support,'' Mr Morrison said after the meeting.
"There has never been a more important time for Australia’s Pacific Step-up as we all face these massive challenges.
"Since January, Australia has provided support for laboratories and public information campaigns, medical equipment, health expertise and for the WHO’s regional preparedness plan.
"We are reconfiguring our development assistance to ensure critical health services can continue to function and to help our Pacific neighbours and Timor-Leste to manage the immediate economic impacts of the pandemic."
$1.2bn!