The largest Chinese investment project in Australia, the $7 billion CITIC Pacific Sino Iron project, conceived by the magnate Clive Palmer, has been dogged by huge cost blowouts and delay. The budget for the project has almost tripled from the initial $2.5 billion estimate.
A second big investment project, the $2 billion Sinosteel Midwest project, was shelved last year after a string of difficulties. The head of Sinosteel, Huang Tianwen, reportedly lost his job because of investments that had gone awry in Western Australia.
The commission has demanded more due diligence and risk management on all overseas investment deals by state-owned companies. No penalties have been announced but executives will be held ''accountable'' for foreign investments that result in significant losses for the state.
Since the start of China's ''going out'' initiative in 2003, which encouraged Chinese companies to invest overseas, Australia has been a favourite hunting ground for them.
The Labor government is believed to have approved more than $70 billion worth of investments from Chinese companies since it was elected in 2007.
That growing investment in Australia will be affected by the commission's new regulations.
''Failed Chinese investors are likely to point their fingers at Australia and there is the potential for the ill-judged investments to become part of the tone of the bilateral relationship,'' the former president of BHP Billiton China, Clinton Dines, said.
But he said there should be a long-term benefit. ''That the Chinese government is putting some filters and hurdles in place to ensure that more proper due diligence is done is a good thing.
''A lot of prospective Chinese investors don't know much about owning, operating and investing in the resources industry. If there were to be too many bad Chinese investments in Australia, these difficulties would inevitably bleed across into the government sphere and that cannot be good for the bilateral relationship.''
Mr Dines, who is now the executive chairman (Asia) of the private equity firm Caledonia, said the introduction of the new rules was ''consistent with the evolution of policy thinking in Beijing'' as the government reassessed resources security.
''The Chinese government has learned two important lessons since the advent of the 'going out' initiative,'' he said. ''Firstly, that Chinese companies are not always equipped to be successful buyers, owners and operators of overseas projects.

With its high quality products such as Stone crushing plant, VSI sand maker, Raw material mill, Sand washing plant, Flotation cell, Henan Hongxing mining machinery Co.Ltd has ascended in the front rank of the world in the exporting of mining equipments.

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