Ann: CKI Proposal APA Grants Due Diligence, page-44

I agree that CKI appears to be, and is possibly less of, a national security concern than some other China-based firms. But the statements above ignore a few facts:

1. CKI regularly partners with the Chinese government. For example, it's partnership with China State Grid was rejected by the OZ government a year or two ago. The senior Li was senior advisor to the Chinese government on the handover of HK in 1997. Other governments have rejected CKI bids due to its government ties. These folks are not at a distance from the Chinese government or its control.
2. Some Hong Kongers like to think they are independent, but not true, as elections last year and in 2014 indicated. And recent actions by China to put Taiwan into China's preferred political domain is further evidence that HK is part of China. Period.
3. The fact that a Chinese firm has global interests is probably not a good justification. Huawei has considerable global interests but several governments (not just US, OZ, and UK) are wary of its activities in some spheres of business.
4. Some OZ gov't decisions against foreign firm acquisitions may seem "fickle". Perhaps some are, but transparency conflicts with diplomacy (even if the Chinese government's subsequent responses are undiplomatic). Diplomatically, a rejected acquisition is stated as not in the national interest. Diplomatic gov'ts don't say that that an acquisitor is associated with a foreign power with a track record of foreign interference and contrary to democratic values and, as such, would likely threaten national security in he long run.

Chinese investment, including complete ownership, of OZ businesses is fine where the business is neither monopolistic nor critical to the national economy. The Swisse purchase and likely acquisition of Sirtex Medical are examples.