Comments on: How do Australia’s foreign investment rules apply to China? http://www.eastasiaforum.org/2009/08/18/how-do-australias-foreign-investment-rules-apply-to-china/ Economics, Politics and Public Policy in East Asia and the Pacific Mon, 13 Feb 2012 06:23:14 +0000 hourly 1 http://wordpress.org/?v=3.2 By: G.E. Andersonhttp://www.eastasiaforum.org/2009/08/18/how-do-australias-foreign-investment-rules-apply-to-china/comment-page-1/#comment-53281 G.E. Anderson Tue, 25 Aug 2009 16:41:42 +0000 http://www.eastasiaforum.org/?p=6479#comment-53281 Mr. Fung's question very poignantly addresses the key issue as it concerns Australia (or indeed, any sovereign country): why the distinction between public and private when any external investor would naturally be subject to Australia's laws? To address Mr. Fung's question as to the logic for such a distinction, I wrote a longer post on my blog that can be found here: http://tinyurl.com/n47zz5. In short, my answer is that there are other "logics" guiding such a distinction. We may not agree with them, but they are nevertheless real for those who hold them. Professor Dufey's comments are much appreciated -- particularly the example of GM US and GM Opel during WWII! The examples of Ford and GM I used above, however, were more to point out the fact that the line between public and private is much clearer in the US than it is in China. Since China is Australia's largest foreign investor, this lack of clarity will inject additional difficulties into the enforcement of Australia's new rules. Thanks very much for your questions and comments! Mr. Fung’s question very poignantly addresses the key issue as it concerns Australia (or indeed, any sovereign country): why the distinction between public and private when any external investor would naturally be subject to Australia’s laws?

To address Mr. Fung’s question as to the logic for such a distinction, I wrote a longer post on my blog that can be found here: http://tinyurl.com/n47zz5. In short, my answer is that there are other “logics” guiding such a distinction. We may not agree with them, but they are nevertheless real for those who hold them.

Professor Dufey’s comments are much appreciated — particularly the example of GM US and GM Opel during WWII! The examples of Ford and GM I used above, however, were more to point out the fact that the line between public and private is much clearer in the US than it is in China. Since China is Australia’s largest foreign investor, this lack of clarity will inject additional difficulties into the enforcement of Australia’s new rules.

Thanks very much for your questions and comments!

]]> By: Gunter Dufeyhttp://www.eastasiaforum.org/2009/08/18/how-do-australias-foreign-investment-rules-apply-to-china/comment-page-1/#comment-53047 Gunter Dufey Mon, 24 Aug 2009 16:55:25 +0000 http://www.eastasiaforum.org/?p=6479#comment-53047 The above is a comment that needed to be made. I go even a step further: as far as control is concerned, the home country fully controls ultimately the behavior of the business firms in its jurisdiction, regardless of stock ownership. Privately owned Ford Motor must comply with all US provisions regarding corporate behavior abroad, from not paying bribes to not trading with certain countries, just like govmt. owned GM. It is only the power of the host country to countermand any orders from the home country that it does not agree with that limits such rules. Classic example: during WW II, GM US built trucks and tanks for the US Army, GM Germany (Opel) did the same but for the German Army! Sovereign action always overrides private property rights. The above is a comment that needed to be made. I go even a step further: as far as control is concerned, the home country fully controls ultimately the behavior of the business firms in its jurisdiction, regardless of stock ownership. Privately owned Ford Motor must comply with all US provisions regarding corporate behavior abroad, from not paying bribes to not trading with certain countries, just like govmt. owned GM. It is only the power of the host country to countermand any orders from the home country that it does not agree with that limits such rules. Classic example: during WW II, GM US built trucks and tanks for the US Army, GM Germany (Opel) did the same but for the German Army!
Sovereign action always overrides private property rights.

]]> By: Lincoln Funghttp://www.eastasiaforum.org/2009/08/18/how-do-australias-foreign-investment-rules-apply-to-china/comment-page-1/#comment-52030 Lincoln Fung Fri, 21 Aug 2009 06:02:54 +0000 http://www.eastasiaforum.org/?p=6479#comment-52030 What does the ownership in terms of public versus private make to owning some shares of a firm in an another country? All firms in a country are subject to the regulations of that country, whether they are owned domestically or by foreign investors. A country can always regulate the behaviour of the firms operate in its land. So what are the concerns or fears of a firm is owned by a public firm of another country? It defies logic to understand the reasons behind. What does the ownership in terms of public versus private make to owning some shares of a firm in an another country? All firms in a country are subject to the regulations of that country, whether they are owned domestically or by foreign investors. A country can always regulate the behaviour of the firms operate in its land. So what are the concerns or fears of a firm is owned by a public firm of another country? It defies logic to understand the reasons behind.

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