Australian newspaper "The Australian" said in an article on Monday that Australia will not realize its potential wealth from minerals without opening its doors to Chinese investment.
"The idea that allowing government-owned Chinese companies to gain a stake in our resource industries is somehow contrary to the national interest is profoundly mistaken," it said.
So far, Australian relationship with China has been completely lopsided. Trade with China has soared to 60 billion dollars, making it our largest trading partner, accounting for 23 percent of the total. Investment from China in 2006 was a paltry 3.7 billion dollars, or less than 0.5 percent of total investment.
"There is a mistaken notion that we have a captive market in China. That may be so for iron ore at the moment, but it won't be the case into the future," the article said.
It pointed out that China's investment abroad was growing fast and if that is frustrated in Australia, it would travel elsewhere.
Although Australia's trade with China has been growing rapidly, rising at a compound annual growth rate over the past 15 years of 16.2 percent, China's trade growth with South America and Africa has been far greater.
South America and Africa would be the obvious beneficiaries from any effort by the Australian government to curtail Chinese investment here. The Government is in a quandary over how to deal with the queue of applications for foreign investment by Chinese companies in the resource sector.
The article finally noted that Australia is unusual in subjecting foreign investment to a "national interest" test. The OECD already ranks Australia as the most restrictive industrialized nation regarding foreign investment. "With a current account deficit approaching 7 percent of GDP, it would be folly to discourage what is likely to be the greatest source of growth in direct investment."