The preliminary decision by Treasurer Josh Frydenberg is the latest in a series of rejections by Canberra over foreign purchases of Australian infrastructure and land as leaders grow increasingly concerned about Beijing's influence.
The visit has been billed as a sign that both governments are keen to ease recent political tensions.
Relations have been strained over allegations that Beijing was interfering in Australian domestic politics and using donations to gain access. Frydenberg said the proposed Aus$13 billion (USD 9.4 billion) purchase of APA "would be contrary to the national interest".
"I have formed this view on the grounds that it would result in an undue concentration of foreign ownership by a single company group in our most significant gas transmission business," he said in a statement.
Frydenberg said there were national interest implications for having "such a dominant foreign player" in the gas and electricity sectors in the long term.
He is set to announced his final decision as part of a formal process within two weeks.
CK Infrastructure Holdings -- which together with CK Asset Holdings and Power Assets Holdings is part of the bidding consortium -- already owns Australian interests including power provider Duet Group.
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