They then run the gamut of public interests tests which China Inc would, on most readings, struggle to pass, ranging from transparency and governance examinations to tests on taxation equality and finally national security.
The point here is that our FIRB rules are potentially as restrictive as any in the OECD. But the FIRB has historically acted as a pathway to investment rather than a roadblock, a facilitator rather than rejector.
It is in Australia's best interest that the FIRB continues to be a means of legitimising foreign investment, by providing a framework to maximise the potential of China's arrival as the world's most powerful foreign investor.
China's new economic assertiveness has raised a collection of unique but essentially obvious challenges. It is a communist dictatorship with a commercial sector which appears still to be more an arm of the state than it is of the market.
China remains relatively closed to foreign takeovers while attempting to take over the parts of the commercial world it covets.
There could well be grave difficulties in the emerging commercial engagement between China and Australia.
Nonetheless, engage we must.
The alternative is to stand aside from a new wave of Chinese capital flows. That would be a once-in-a-century error, one which would see us squander the competitive advantages delivered by our natural abundance in the name of historic enmities and fears.
China, like Japan and Korea before it, is pursuing investments in minerals and energy companies because it seeks security of supply and a hedging investment in the boom its demand is creating. So it is likely we will see a layered approach to investment: China will attempt to acquire control of emerging players while it will take sensible minority positions in majors.
Securing a sensible and sustainable share of Chinese capital out-flows will mean that, all things being equal, more Australian minerals houses will be substantially owned by Chinese interests. It will mean too that China Inc may hold meaningful stakes in resources majors, including the jewel in the national crown, BHP Billiton.
Kevin Rudd's role in shaping our approach to Chinese investment will be interesting to watch.
Establishing and protecting Australia's new place in the world was one of the reasons Rudd was elected. The Prime Minister's mastery of Mandarin was one of the subtle differentiators between he and his predecessors. He is Regional Man, the guy who walks and talks the talk.
But conversation and compliance are two different things.
Since Christmas the Government has deliberately slowed China's approach, putting a welter of applications into suspended animation as internal and external sensitivities are assessed and addressed.
Given the nature of Rudd's politics, it is likely that the regulatory pause is indicative of wider community anxieties.
And that is why, from China Inc's perspective at very least, the Takeovers Panel's findings on the Mount Gibson debacle should prove worrisome.
At its heart, the Mr Gibson case could feed fears that Chinese business remains uninterested in external national rules on transparency and compliance, that it is self-interested and opaque, and operates to circumvent free and open markets.
In January Russia's Gazmetall announced a deal to sell its 19.86 per cent stake in Mount Gibson to Shougang Corporation of Hong Kong.
It turns out, according to the Takeovers Panel at least, that Shougang is associated with APAC Resources, which already owned 20.19 per cent of Mount Gibson.
It also turns out that directors of both APAC and Shougang are either friends or allies of Lee Ming Tee, a businessman who has in the past attracted the gaze of market regulators in Australia and Hong Kong.
Mount Gibson is a relatively minor miner that produces 3 million tonnes of high grade iron ore from a small mine at Koolan Island, in far northwest WA.
According to the version of events accepted by the Panel, Shougang and APAC were working to express control over Mount Gibson with the aim of overturning existing supply contracts and securing their own supply deals at a 10 per cent discount to the market price.
Needless to say, this is not the way things are supposed to work under Australian Corporations Law. Once an investor crossed the 20 per cent threshold (unless through the mechanism of creeping) then a matching offer is required to be delivered to all shareholders.
The tricky thing here is that a Byzantine ownership flow chart suggests only limited direct linkage between Shougang and APAC. What the Panel did find was an alliance of interests delivered through the personalities involved in the deal.
It was clearly puzzled by Lee's routine involvement in the dealings between Shougang, Gazmetall and Mount Gibson, despite his utter lack of formal standing.
Lee appears to be neither director nor owner of either company, yet he was constantly at meetings and, on one occasion, an uninvited guest at a Koolan Island site visit.
APAC's claims that Lee was acting as a translator at meetings was undermined by the fact that twice he attended gathering when the director he was designated to
translate for did not turn up. And how Lee joined the site visit remains a mystery.
Ultimately the Panel found it was not credible that Lee attended meetings as a translator and that he rejected an invitation to give evidence to the Panel because it "would not have been helpful to APAC or Shougang".
"In the absence of evidence contradicting statements attributed to Mr Lee, the Panel is satisfied that the statements attributed to him accurately record the content of the conversations in question and the conduct of Mr Lee at various meetings.
"From the evidence, the Panel has inferred that Mr Lee did have an interest or role in APAC and a plan for Gazmetall's shares in Mount Gibson."
The Takeovers Panel's assessment of this nasty little affair runs to 25 pages. It is a document which should be digested slowly and carefully by China Inc and its rulers, because it should serve as a guide on how not to conduct business in Australia.
