Treasurer Joe Hockey approves China State Grid deal to buy large stakes in power companies Australia has approved China's State Grid buying a $5 billion stake in local power companies. Treasurer Joe Hockey is confusing foreign investors after clearing the way for a Chinese state-owned company to buy stakes worth as much as $5 billion in Australian power companies, a former Reserve Bank official says. Mr Hockey on Friday allowed State Grid Corp of China, the world's biggest state utility, to buy 19 per cent of electricity supplier SP AusNet and 60 per cent of energy infrastructure company SPI Australia. On the same day he appointed his former federal Liberal colleague Patrick Secker to the Foreign Investment Review Board as a "part-time" member. The State Grid approval came three weeks after Mr Hockey rejected a $3.4 billion takeover of GrainCorp by US agribusiness company Archer Daniels Midland, which attracted heavy criticism, even from inside the Coalition, that it would spook foreign investors. Mr Hockey maintained that "Australia is open for business," saying "we welcome foreign investment when it is not contrary to the national interest." But Paul Bloxham, a former Reserve Bank official who is now the chief economist for one of Asia's biggest banks HSBC, said the Treasurer was sending mixed messages. Mr Bloxham said Australia's foreign investment rules needed to be clearer and the approval process more transparent to attract overseas capital. "Foreign investors need to know which assets are accessible and which are not," he said. There needs to be a focus of clarity and consistency of the message so foreign investors know how they can get involved in the Australian economy. We are reliant on foreign capital. It is one of the things that continues to support our positive growth prospects. Prime Minister Tony Abbott has defended the government's decisions regarding foreign investments, saying out of 131 applications 130 have been approved, thus rejections were rare. But Mr Bloxham said the Prime Minister was missing the point. For foreign investors ...it is not the rarity that matters most, but the rationale for the rejection. Clarity about the reasoning for the rejection is important so that foreign investors know which are accessible to foreign investors and which are not. State Grid has been building its presence in the Australian energy sector, buying a 41 per cent stake in unlisted South Australian electricity supplier ElectraNet from the Queensland state government's Powerlink last year. As a condition of approval for the latest deals, at least 50 per cent of the new board members to be appointed to SP AusNet and SPIAA must be resident in Australia. SP AusNet, listed in Australia and Singapore, owns and operates electricity and gas distribution assets in Victoria, including the state-wide electricity transmission network. SPI will continue to hold a 31.1 per cent stake in SP AusNet and SP AusNet will remain publicly listed. SPIAA, which uses the trading name Jemena, owns electricity and gas distribution networks. State Grid announced in May it was purchasing the stakes from a unit of Singapore's Temasek. Financial terms were not disclosed, but Reuters calculations put the value at more than $5 billion including debt. Mr Hockey announced the appointment of Mr Secker - who in March lost his preselection challenge for his seat of Barker in rural South Australia which he had held since 1998 - to FIRB about 4pm on Friday. Mr Hockey said he had "extensive experience in agriculture," being a fourth-generation farmer and long-serving member of the South Australian Farmers Federation.