Australia on Wednesday blocked a bid of more than USD9 billion from Hong Kong giant CK Group for the country's biggest gas pipeline company, saying it would be against its "national interest".
The preliminary decision by Treasurer Josh Frydenberg is the latest in a series of rejections by Canberra over foreign purchases of Australian infrastructure and land as leaders grow increasingly concerned about Beijing's influence.
It comes at a sensitive time, with Foreign Minister Marise Payne currently in China for meetings with her counterpart Wang Yi -- the first visit of its kind in almost three years.
The visit has been billed as a sign that both governments are keen to ease recent political tensions.
Relations have been strained over allegations that Beijing was interfering in Australian domestic politics and using donations to gain access. Frydenberg said the proposed Aus$13 billion (USD 9.4 billion) purchase of APA "would be contrary to the national interest".
"I have formed this view on the grounds that it would result in an undue concentration of foreign ownership by a single company group in our most significant gas transmission business," he said in a statement.
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APA has 15,000 kilometres of pipelines representing 56 percent of Australia's gas pipeline transmission system.
Frydenberg said there were national interest implications for having "such a dominant foreign player" in the gas and electricity sectors in the long term.
He is set to announced his final decision as part of a formal process within two weeks.
The Treasurer stressed that Australia's foreign investment policy was not discriminating against any investor and country, and that his decision was not an adverse reflection on CK Group.
CK Infrastructure Holdings -- which together with CK Asset Holdings and Power Assets Holdings is part of the bidding consortium -- already owns Australian interests including power provider Duet Group.
The APA acquisition would have been the latest in a string of takeovers in recent years by CK Infrastructure in Australia, including Duet Group last year and gas distributor Envestra in 2014.