Last year, an election in Zambia was fought over the issue of Chinese investment, and culminated with the populist leader Michael Sata winning the vote on an anti-Chinese investment platform. There were bouts of bad publicity surrounding Chinese companies that operate across the African copper-belt, with both local and international media extensively covering the shootings of several Zambian workers by their Chinese managers.
Similarly, China’s investment ventures in Australia and the US have been greeted with unflattering press coverage. For example, Australia’s only national daily, the Australian was splashed with the headline ‘Say no to Chinalco’ in 2009, at a time when the Chinese aluminium giant was making a bid for a significant portion of the Anglo–Australian miner Rio Tinto.
The editorial called for Canberra to reject the proposed deal on both economic and geostrategic grounds. And that was just one example of media coverage pertaining to Chinese investment, which eventually contributed to a rather poisoned environment in which to conduct related policy debate.
The contemporary portrayal of Chinese investment echoes the media coverage of Japanese investment in the 1980s. The concerns of two decades ago — namely, the close relationship between government and corporations — seem to still resonate with commentators today. In the 1980s one of Australia’s most influential metro newspapers, The Sydney Morning Herald, described the connection between Tokyo and its corporate giants as ‘a single piece of seamless fabric — companies interwoven with government’. Two decades later, The Australian simply tagged Chinalco as ‘an arm of the Chinese government’.
Media thus plays an influential role in setting the tone and context of public debate surrounding Chinese investment. Most importantly, it can also feed into the foreign investment screening process.
It is widely held that the Australian Foreign Investment Review Board decides whether to approve or reject foreign investment proposals when, in fact, it is simply an advisory body to the treasurer, who is vested with vast and discretionary power under the Foreign Acquisition and Takeovers Act. The Australian system operates on the same principles as the Committee on Foreign Investment in the US, where an inter-departmental advisory body advises the ultimate decision-maker, the US president. Though bureaucrats oversee and assess investment proposals, politicians have to sign off on these deals and are ultimately responsible for approving or rejecting foreign investment transactions.
Given politicians’ sensitivity to and — one might even say — obsession with the news cycle, it should come as no surprise that media coverage of issues surrounding foreign investment has become a subtle and yet influential force on the decision-making process.
Sensationalist reports by the tabloids and radio shock-jocks can quickly build heat around specific issues, with foreign investment in Australian agribusiness and rural land being the most recent example. If there is one thing worse than selling mineral wealth to Beijing — so the argument goes — it has to be allowing foreign landlords to take control of Australian farms. Politicians are naturally afraid of being accused by the media of ‘selling the family silver’ or of ‘failing to protect the national interest’. For this reason, politicians can be reluctant to defend Chinese foreign investment and are more prone to take a supposedly hardline approach to placate their anxious voters — sometimes just for the sake of appearances.
Chinese companies’ insufficient understanding of media culture and of this difficult political situation has made their already precarious situation even worse. With few exceptions, Chinese investors in Australia are reluctant to engage with the local media. And this wall of silence invites natural speculation and suspicion.
One notable exception to the rule is Huawei Technologies, the Chinese telecommunications giant whose media outreach program is possibly the most active among Chinese investors. Privately-owned companies are more media-savvy than their state-owned counterparts, which still operate like the old bureaucracies. Yet Huawei’s recent failure to secure supply contracts for the Australian national broadband network illustrates the limits of its charm offensive.
Individual corporate actors may go to great lengths to improve transparency, but they simply cannot compensate for the general murkiness of ‘China Inc’. For as long as Beijing retains its sprawling influence in the running of the economy and stubbornly holds on to its authoritarian political system, there will always be reason to maintain suspicion about the motives of Chinese companies investing overseas.
Better public relations management may allay some fears about Chinese companies, but it can never fully address the most fundamental problem: a simple lack of trust in the Chinese government. Full political and community acceptance of Chinese investment will only be possible when Beijing gets its own house in order. China’s demand that foreign regulators act transparently and in accordance with due process will seem laughable so long as Beijing fails to implement the same conditions at home, such that Chinese domestic reform should also have the added benefit of alleviating fear abroad.
Peter Yuan Cai is an Australian journalist and a former Commonwealth Treasury policy analyst. The views in this article are his own and not those of his current or former employers.
This article appeared in the most recent edition of the East Asia Forum Quarterly, ‘China’s Investment Abroad’.