Friday 08 Oct 2021 | 03:41 | SYDNEY
Friday 08 Oct 2021 | 03:41 | SYDNEY

Canberra answer to Chinese investment: Yes, but...


Mark Thirlwell

27 April 2009 13:42

So, as The Australian puts it, that's two down and the big one (Rio) still to go.  Last week, the Treasurer quietly announced that he had approved a revised bid from China’s MinMetals for Oz Minerals, after having knocked back an earlier bid on national security grounds. And last month, he approved an application from Hunan Valin Iron and Steel Group for up to a 17.55% shareholding in Fortescue Metals. Both deals were approved subject to a series of conditions.

The decisions taken so far tell us something about Canberra’s views regarding the policy issues raised by the surge in Chinese investment into the Australian resource sector. The fact that both deals were approved indicates a recognition that China will have an important role to play in Australia’s investment future. But the fact that they were both subject to a series of conditions – in particular relating to pricing and commercial behaviour – suggests the Government hasn’t yet fully bought into all those reassurances that Chinese state-backed investors will act in the same way as private sector players.

So for now, the message from Canberra to Beijing seems to be: ‘Yes, but’.  That is, ‘Yes, we will accept Chinese investment into the Australian resource sector, but we want to make sure that this investment plays by the same rules as other investors do, because right now we have some doubts.’ As compromises go, it’s not a bad message to send. 

Photo by Flickr user kool_skatkat, used under a Creative Commons license.