The role of government is to act in the interests of all Australians not just a few shareholders who made bad decisions. The real assets will still be there but they will be owned by some other Australian who will pay a lower price. This is normal in a boom bust cycle.
China gets its money from the US printing press and does not want to hold dollars becuase they are depreciating rapidly. They want real long term assets.
China has achieved its massive reserve on the back of currencly manipulation. They should be using most of that surplus to buy capital and goods from the US and Europe to help them develop and provide a better standard of living for their people. Instead they are using the funds as a form of imperialism.
One solulation is that we will have to raise the income tax on resource companies much higher say to 70-80% and ensure that they can not minimise their taxes (eg News Corp used to only pay about 1.5 cent in each $1 of profit- not sure what they pay now). Thailand for instance has very taxes on oil (up to 90% of profits) so it being done overseas.
Xstrata doubled in size from its acquisition of MIM and used the profits from MIM to grow very rapidly by further acqusitions and expansions. In effect the Australian taxpayer is funding the expansion of Xastrata, and this is what the Chinese govt is seeking to do for themselves. There is also the issue of transfer pricing that has occurred in the past with other overseas based firms having major resource operations here.
The growing level of foreign ownership is simly not sustainable for Australia in the longer run. It is taking away from future generations in order to give the current generation added consumption.
