Former Australian ambassador Geoff Raby said Australian businesses with operations in the country often mistakenly believed that direction and management was best left to the Chinese, when in fact the opposite is true.

"The current Australian board mentality is 'you have to localise; you can have only local people running business in China'. Too often boards will put someone in the job and then basically take their hands of the wheel."

"In fact, if you're doing business in China you need intensive engagement, you need to be there, and often you're better off having a foreigner in that role who understands and completely embodies core corporate values," he said.