Prime Minister Tony Abbott has abandoned his early hardline stance on Chinese state-owned enterprises in an effort to finalise a much sought-after Free Trade Agreement (FTA) with China before the state visit of President Xi Jinping in November this year.

Mr Abbott said that he recognised that Chinese state investors behave like “commercial enterprises” and compared them to Japanese and Korean companies that worked closely with their respective governments.

“We welcome Chinese investment, we want to offer Chinese investment the same kind of access to Australia that our other free-trade partners do get,” he said.

“I have to say that one of the things that I’ve learned better over the last few years is that Chinese state-owned enterprises are highly commercial operations.

“They don’t normally operate in the kind of way that a nationalised industry might have operated back in Australia and one of the points that I’ve been reiterating again and again here in China is that no SOE foreign investment application has ever been knocked back.”

The comments mark a significant departure from Mr Abbott’s previous stance as the leader of the opposition, when he said that investments from Chinese state-owned enterprises were not necessarily in Australia’s national interest.

“Chinese investment is complicated by the prevalence of state-owned enterprises,” Mr Abbott told the Australian Chamber of Commerce in Beijing in July 2012.

“It would rarely be in Australia’s national interest to allow a foreign government or its agencies to control an Australian business.”

At the time, Mr Abbott’s speech caused consternation from Chinese and Australian business leaders, who were concerned about the Coalition party’s policy position on foreign investment.

Australia has recently approved significant investments from Chinese SOEs including State Grid Corporation of China’s investment in critical electricity transmission network.

Mr Abbott also warned against populist backlash against Chinese investments, and emphasised the government’s strong support for foreign investment.

“We know that foreign investment can be contentious and we know that it’s easy enough to whip up a storm about selling off the farm -- and depending upon the mood, depending upon the particular example, some people can be furiously in favour of foreign investment and the same person, given a different time and different circumstances can be quite ambivalent about foreign investment,” he said.

“But what I don’t think we ought to be doing here is playing to the gallery back home… I don’t really think we want to be getting a shock-horror headline ‘The Chinese are coming’ or something like that.”