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China is poised to gain a major foothold in Ord River farmland, with the Shanghai Zhongfu group tipped to be announced next week as the successful bidder for 15,000ha of land east of Kununurra, which it will use to grow sugar.

The prized agricultural asset is part of the WA and Federal Governments' $500 million expansion of the rural region, being driven in the main by the Nationals' Royalties for Regions scheme.

Sources close to the development said the Chinese conglomerate, which has links to former Prime Minister Bob Hawke, will be unveiled as the successful bidder next Tuesday, beating out a rival bid by Australia's oldest company and biggest landholder, AACo, to grow cotton on the same land.

The announcement will come at a sensitive time, with debate raging about Chinese investment in Australian farms. The project has also attracted criticism for costing $100 million more than budgeted.

However, Nationals Leader Brendon Grylls has stared down his detractors, especially in the Federal National Party, and has argued that Chinese investment, as in the resources sector, can be positive.

Sugar was previously grown in the Ord, but suffered from a lack of scale to support a mill.

It represents the second major Asian sugar play in Australia recently, with Chinese giant COFCO buying the Tully sugar mill in north Queensland last year.