Trade proposal's a bit rich WHAT does China really want from Australia? Trade Minister Craig Emerson revealed the answer yesterday, in response to a question at the Global Food Forum in Melbourne. Now that it has come to the crunch, with the government shelving its holy-grail comprehensive trade negotiations in favour of a food-focused FTA-lite deal, China too has narrowed its demands. It wants to be able to invest up to $1 billion at a time without having to seek Foreign Investment Review Board approval. Almost all its investments to date have naturally come from the state-owned enterprises which dominate its domestic economy. All such SOE investments - from whichever country - require the FIRB tick, which has always in recent years been given, though occasionally after delays or with conditions attached. Australia remains - just - China's biggest target for overseas investment, so there's been no great disaster in this space. By comparison, Australian investment in China is tiny, partly because of our own failure of spirit and persistence, but mainly because the barriers remain varied and often insurmountable. But Chinese lobbyists and even diplomats continue to complain of "discrimination" against their investment - even while they are at the same time seeking special treatment. What does this all mean for our FTA hopes? The two teams are meeting in Surabaya, Indonesia, this weekend and as the talks enter their ninth year, we must always leave room for hope. But the message Team China has relayed, in response to Emerson's sensible decision to seek a slimmed down deal from which to build, has been to make a gambit claim, as Stephen Loosley described it at the forum. This is not a promising position. It is being made in a contentious area, in the run-up to what is already proving a bitterly contentious election campaign. Emerson said: "So we're in a situation where China is saying, 'At this stage, non-negotiable. It's gotta go from zero to a billion'. We aren't in a position, given community sentiment, to lift that to a billion dollars, so that's where we're stuck. The community wouldn't accept that, nor would the opposition. The Coalition has said it wants the threshold for private investments to be reduced to $15 million, with Opposition Leader Tony Abbott saying in Beijing last year that SOE proposals will face a tough time. So the bottom line is that while Emerson gamely says "there are many paths to the mountaintop," the present paths don't look promising. Maybe China's new leadership wants to tread water until it faces a likely new team in Canberra, thus its ambit claim.