CHINA voiced anger Friday over a decision by Australia to rule out on security grounds the preferred Chinese bidders for an energy grid potentially worth more than US$7 billion and restart the sale process.

    Australia’s Treasurer Scott Morrison, who must approve major foreign investments, formally blocked the sale of Ausgrid to State Grid Corp. of China and Hong Kong’s Cheung Kong Infrastructure Holdings earlier in the day.

    Last month, Britain said it would review plans to build two nuclear reactors at Hinkley Point with financial backing from China General Nuclear. Prime Minister Theresa May was concerned about the security implications of the proposed Chinese investment, a former colleague and a source said.

    The disqualification of State Grid and Cheung Kong Infrastructure prompted the state of New South Wales (NSW) to restart the tender process for a majority stake in the grid.

    “The NSW Government will now move immediately to relaunch the transaction process for the partial lease of Ausgrid and notes the strong market interest for this valuable asset,” NSW Premier Mike Baird said in a statement.

    The decision to halt the A$10 billion (US$7.6 billion) sale — Morrison made a preliminary decision to block earlier this month before confirming the stance officially Friday — has caused a rift with China, Australia’s biggest trade partner, just eight months after their A$100 billion free trade agreement took effect.

    China’s commerce ministry said in a statement on its website that the decision showed uncertainty in Australia’s investment environment and would seriously hurt the willingness of Chinese companies to invest in the country.

    State Grid said it “found it hard to understand and deeply regretted” the decision, adding it had followed regulations set by Australia in its bid and met all the bidding requirements.

    The actions by Chinese companies were normal business activities in line with market principles, MOC spokesman Sun Jiwen said, adding that they had followed international bidding procedures and cooperated in Australia’s security inspection.

    China respects the Australian safety inspection for foreign investment based on its laws, but blocking the sale in the last stage of the public bidding process revealed uncertainty in the Australian investment environment, Sun said.

    The rejection will “severely hurt the willingness of Chinese companies to invest in Australia and exert negative influence on Sino-Australian economic and trade relations,” Sun said.

    He added that China hopes Australia will use caution when adopting security inspection practices in order to create a fair, equitable and transparent environment for foreign investors.

    It was not the first rejection by the Australian Government of Chinese investment. Earlier this year, Australia blocked the sale of a cattle company to a Chinese consortium, citing Australia’s national interests.(SD-Agencies)