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Business

Australia blocks big China deal over 'security'

Opening sequence

Opening sequence

Business

Australia blocks big China deal over 'security'

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COMING UP:Australia blocks big China deal over 'security'

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00:00:02
>> Australia blocking Chinese bidders from buying down under. The country's foreign investment authorities denying the merely $8 billion sale of the country's biggest energy grid, citing security reasons. Officials on Monday saying it wasn't a political move, that they were merely responding to quote, new information. The two companies who were denied, one Chinese and one from Hong Kong, had already invested billions of dollars in Australia before.
00:00:27
Sources gave Reuters Jonathan Barret in Sydney a clearer picture of Australia's hesitation.>> A senior government politician told me that there were concerns within government ranks that China was being too assertive in the South China Sea and there was an understanding that the government was more authoritarian than previously thought.
00:00:50
This fed into the decision to not back the proposed bid for AusGrid.>> While the government hasn't come clean over exactly why they blocked the sale. This behavior does fit an Australian pattern of pleasing a major ally.>> It's not known whether the US had any direct involvement in this decision.
00:01:11
Although we do know that last year, when the port of Darwin was leased to China's interest, Australia was heavily rebut by the United States specially as Australia has defense vessels in the port. And we do believe that this go some way to explaining why there has been a different reaction to Chinese investment in Australia, as previously this has generally been welcomed.
00:01:39
>> China is Australia's biggest trading partner, and without big bidders in the mix, future auctions of Australian state assets like the grid could yield a lot less profit. It's also a sign that when it comes to the south China Sea, even matters of trade can get caught up in the military tension.