The question of foreign investment in Australian infrastructure is a contentious issue.
The Government established a Critical Infrastructure Centre this year to advise and support government agencies in identifying the security and other risks involved in various investments.
Critical infrastructure refers to pieces such as power grids, ports and roads essential to the broader Australian economy and national security.
The head of the Australian Strategic Policy Institute's risk and resilience program, Paul Barnes, says the overhaul is welcome.
"National economies have different rules across the planet about who can invest in infrastructure systems. Certainly, the Chinese have their rules -- some of those are quite archaic. But also the US, Canada, the UK, other modernised economies all have rules about who can invest and how much they can invest in their systems. So Australia's not alone, in terms of engaging with these questions."
China is only the seventh largest country in terms of total foreign investment in Australia, but it attracts by far the most attention.
Its investments are also growing -- in the 2014-2015 financial year, China was first in new investment.
The Foreign Investment Review Board has not released any newer figures yet.
Last year, the New South Wales government was on the brink of granting a 99-year lease for the electricity provider Ausgrid to investors from mainland China and Hong Kong.
But in August, just before the sale went ahead, the Federal Government stepped in to block it, citing national-security concerns.
It is that kind of uncertainty that has led to concerns Australia may be scaring away much-needed investment.
In a paper submitted to the Attorney-General, the Law Council of Australia says the government needs to clarify what scrutiny will be applied to different types of investment.
"Foreign investors should not be discriminated against unfairly, based solely on prejudice and without credible evidence that their foreign ownership has contributed to national-security concerns."
Economist James Laurenceson, from the Australia China Relations Institute at the University of Technology Sydney, says guidelines are badly needed.
He says the two companies engaged in the bidding for Ausgrid had invested millions of dollars in preparing the bid before the sale was blocked.
"I talked to the two companies that bid for Ausgrid -- State Grid, Cheung Kong Infrastructure -- and not once did they complain that they should be allowed to bid for certain assets in Australia. They understand that Australia is a sovereign country and we get to decide which sectors foreign investors can bid in and which they cannot. What they complained about is the process, that they were actually asked to bid for these assets, encouraged to do so, short-listed, and then, at the last hurdle, they were told they were a national-security threat."
Professor Laurenceson says, without changing the foreign-investment approvals process, Australia risks tarnishing its international reputation.
But he says the government establishing a centralised hub like it has is a good first step.
"What we need to do is provide clarity to foreign investors about where they can bid and where they can't and those sectors where they can fully expect to have challenges, in terms of national security. At least, that way, they can take it into account, whether they decide to bid or not. At the same time, we need to be balancing that with the fact we do actually need this foreign investment, and Australia gets real benefit from when they put their money here rather than keeping it at home."
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