THE federal government has ruled out tougher rules for foreign investment in agriculture, warning that any such changes could damage Australia's economic relationship with China.
Ahead of a major speech today in which federal Treasurer Wayne Swan will call for closer business-to-business links between Australia and China, his cabinet colleague Craig Emerson said there was no case for imposing new controls to limit Chinese investment in Australia.
Dr Emerson said foreign investment, including from China, would play an important part in Australia's plans to take advantage of the rapidly rising demand for food in developing countries – demand which could lead to a boom in agricultural production with opportunities for farmers similar to the opportunities the resources boom has opened up for mining companies.
Speaking to The Australian Financial Review ahead of the release of a paper he wrote on Australia and the Asian Century, Dr Emerson said: "At least some foreign investment is essential for lifting Australia's food production capacity. It always has been, always will be.
"For Barnaby Joyce (the leading coalition advocate of tighter foreign investment rules for agriculture) to claim it can be done through Australian savings is politically opportunistic claptrap," Dr Emerson said.
"Coalition proposals to lower the FIRB screening threshold for private investment from our non-FTA (free trade agreement) partners would be seen by China as specifically targeting its private companies – at potentially great cost to Australia."
The Land
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