Australia’s national security in spotlight as it steps up screening foreign investments in ‘sensitive’ sectors

Australia will tighten screening investment interest in critical minerals, technology, infrastructure, and undertake on-site visits of foreign-owned investments

Stricter rules are no surprise since Australia has to protect critical assets, analysts say, but collaboration with China in green energy would be unavoidable

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A mining worker walks past sacks of rare earth concentrate waiting to be shipped, at Mount Weld, northeast of Perth. Australia will step up screening investment interests in critical minerals, technology and infrastructure. Photo: Reuters

Published: 8:00am, 3 May 2024Updated: 9:40am, 3 May 2024

An overhaul of Australia’s foreign investment policies, which has resurfaced scrutiny of Chinese interests in the country, and news of an expulsion of suspected Indian spies have cast the spotlight on Canberra’s national security.

Analysts say Australia’s tighter investment rules were not surprising since the country has to protect critical assets, but collaboration with China, especially in sectors such as green energy, would be unavoidable.

Australia’s Treasurer Jim Chalmers on Wednesday unveiled changes to foreign investment rules, describing growing threats from intensifying geopolitical tensions.

To balance economic benefits from foreign investments – which were key to the economy – and to protect national security, Australia would step up screening investment interests in critical minerals, technology and infrastructure.

Chalmers said the overhaul was not targeted at specific countries, such as China, which has been accused of foreign interference in Australia in the past. Any foreign investment applications involving “sensitive data sets” or were close to defence sites would be more closely looked at, he said.

Canberra would also undertake on-site visits of foreign-owned investments while low-risk deals would receive faster approvals.

The nation’s premier bilateral business association, the Australia China Business Council (ACBC), said Chinese investors would not be surprised by the changes.