FIRB sends China wrong message: Barnett

Australia's foreign investment rules are sending the wrong message to China, Premier Colin Barnett says.

The Liberal leader said the US could invest more than $1 billion in Australia without being subject to Foreign Investment Review Board rules, but it was different for China's state-owned enterprises.

Speaking during a trade mission in Beijing, Mr Barnett said any level of investment by Chinese state-owned enterprises from $1 up went through the FIRB process.

"I think Australia needs to correct that. That is giving the wrong signal to China, and I've no doubt, causes resentment," he said.

Mr Barnett is trying to drum up a major Chinese backer for the $6 billion Oakajee port project in the Mid West, which was indefinitely mothballed last year when Japan's Mitsubishi decided to "slow down" work on the already-stalled plan, after talks with potential joint-venture partners languished.

Oakajee was to export iron ore from the magnetite-rich region, but the low-grade product fell out of favour with a slide in iron ore prices and wavering Chinese demand.