When the federal government blocked two Chinese firms from buying a 99-year lease of Sydney's electricity network, it sparked a firestorm of criticism. And it's still raging.
On the face of it, the critics seem to have a pretty good case. Most colourful was the former Labor foreign affairs minister, Bob Carr, a regular commentator on China now that he fronts the Australia-China Relations Institute.
By preventing the two Chinese companies from buying a controlling 50.4 per cent stake in Ausgrid, said Carr, the Turnbull government had made "a policy sacrifice to the witches' sabbath of xenophobia and economic nationalism stirred up in the recent federal election".
It's a very unpleasant thought that Australia would turn away a prospective $10 billion investment out of sheer xenophobia. China's foreign affairs ministry picked up on the theme.
The decision was a matter of "deep concern" said the foreign affairs ministry in Beijing. Australia should "avoid discrimination and provide a fair environment".
China's commerce ministry added that there would be consequences. "This kind of decision is protectionist and seriously impacts the willingness of Chinese companies to invest in Australia," ministry spokesman Shen Danyang said.
Implication: Chinese investors will take their money elsewhere and Australia will suffer.
Among foreign investors in Australia, the US has the biggest accumulated stock of investment at $860 billion last year or 28 per cent of the total at the end of 2014-15, followed by Britain, Belgium, Japan and Singapore.
But for new investments, China is the biggest source, with approved investments in Australia last year of $46 billion, accounting for a quarter of the total for the year, according to the Foreign Investment Review Board.
And China is Australia's biggest trading partner, so a potential backlash must be a worrisome prospect.
In announcing his veto, the Treasurer, Scott Morrison, said: "In making this decision, national interest concerns have been paramount. They relate to the transaction structure as currently proposed and the nature of the assets." He would go no further in explaining.
But in attacking the decision, Carr pointed out that one of the two bidders, China's government-owned State Grid, already had investments in two other electricity providers in Australia. There were "serious inconsistencies" that needed to be addressed, he said.
On this point, Morrison has only said that Ausgrid is not the same as the other electricity firms.
And Morrison has form. His decision to twice block a Chinese buyer from acquiring the vast S. Kidman & Co pastoral property, Australia's biggest by land area, was based purely on public concern over foreign ownership.
So what's going on here?
To make sense of this, let's go beyond the politicians. The clearest explanation of the Ausgrid decision has come from a rare public intervention by the chair of the Foreign Investment Review Board, businessman Brian Wilson.
Wilson told The Australian Financial Review's Aaron Patrick that the board was unanimous in recommending against the bidders: "The proposed structure is contrary to the national security interest because it leaves a material national security vulnerability," Wilson said.
"Almost by definition, it is not a security issue you can disclose."
Wilson added: "This particular decision was in no way politically influenced. It came down to a genuine national security issue that became apparent as the detailed work was done on the asset sale.
"Sometimes at the end of the day, a government might make a decision to keep the general public happy." Kidman, for instance. "This is not one of those cases," Wilson concluded.
The exact nature of the "national security vulnerability" is classified. But, again reaching beyond the politicians, the following agencies were unanimous in recommending to the government that the sale be blocked: the Australian Security Intelligence Organisation, the Australian Signals Directorate, Australia's electronic spy agency, and the Department of Defence.
These agencies gave the go-ahead for a Chinese firm, Landbridge, to buy a controlling interest in the Port of Darwin; we can conclude they are not acting out of xenophobia.
In this circumstance, the question is not: "How could the Treasurer block the bidders?" The question is, with the security and intelligence agencies united in advising against it, how could any Treasurer approve it? He would be eviscerated, and rightly, for betraying the nation's security.
As for Carr, he should understand the paramount importance of national security.
When the federal government barred China's Huawei from bidding to build the National Broadband Network in 2012, Carr, as foreign minister, said that Australia was entitled to defend its national security.
"I don't think any other country in the world would have made a different decision in the circumstances," he told ABC's 7.30. "And I'd like to think on the bottom line, after due consideration, the Chinese would accept this."
Which, of course, they did. Since then, Australia has signed a free trade agreement with China. China's investment into Australia has boomed. Two-way trade has thrived. The two countries have agreed to annual leaders' meetings. And they've conducted their first joint military exercises.
Chinese bluster is part of the theatre. Doesn't Carr understand this? He certainly should. In 2012 he was paid to represent Australia. Today, his partly Chinese-funded institute pays him to be part of the Chinese bluster.
If the Chinese truly believed the Ausgrid decision was discriminatory, they would have asked to see the Department of Foreign Affairs and Trade about their concerns. Or to see Foreign Affairs Minister Julie Bishop. Or Treasurer Scott Morrison. Or Prime Minister Malcolm Turnbull.
In fact, China has approached none of them about the Ausgrid decision. Bob Carr may want Australia to live on its knees to foreign interests; the Chinese government is more realistic. Illustration: John Shakespeare
Peter Hartcher is international editor.