A Remarkable Place at a Remarkable Time: Australian Foreign Direct Investment Screening as Governmental Foreign Policy

Abstract

In this thesis I explain the changes made to Australia’s foreign direct investment (FDI) screening policy by the first Rudd Government (2007-10). The changes were made in response to a wave of large investments by Chinese sovereign-owned enterprises in the Australian resource sector. These were interpreted by the Rudd Government as a threat to the integrity of Australian markets, and to the sovereign right of the Australian Government to define the nature of those markets. The Australian Government aimed to draw on the leverage born of its sovereign control over raw resources vital to the Chinese economic transformation to insert Australia into a conversation on the rules of a new regional order. Neither the strategic depth of the Rudd Government’s engagement with China, nor the centrality of FDI screening policy to that engagement, have yet been fully appreciated. The policy contains the key to the Australian understanding of the problems associated with deeper economic integration with the emerging superpower. These problems were at once geopolitical, economic, and ideological. As the relationship with China can be expected to dominate Australian foreign policymaking for the coming decades, understanding the precise nature of this nexus of concerns has enormous value for both policymakers and analysts. To explain the departures that appeared in the policy, I draw on Foucauldian governmentality. I show that the construction of the policy problem conformed strongly to governmental precepts, and that the experiments with foreign policymaking that appeared can usefully be thought of as experiments with the neoliberal governmental state. Governmentality offers a set of theoretical constructs that transcend the dividing lines between economics, geopolitics, and ideology that appear in liberal economic and political theory. As a theory based on the insight that the liberal state, and the formations that appear in it, are not natural, but historically and contingently produced, governmentality is well-placed to conceptualise the issues that arise in the historically unique integration of a liberal economy with a much larger illiberal one.