Rio Investment Independent: China
Sydney Morning Herald
Wednesday February 6, 2008
CHINA'S Foreign Minister, Yang Jiechi, has distanced his Government from Chinalco's investment in Rio Tinto, saying the dawn raid is an independent decision by the Chinese-owned company and Alcoa.
"We just respect the two companies' decision," Mr Yang said in Canberra yesterday. "They did it, I guess, for their companies' own good, and they think that to do this would help the development of their business." As Mr Yang made his first visit to Canberra as Foreign Minister, the president of Chinalco, Xiao Yaqing, was also in the capital to try to allay any concerns in the Rudd Government that Chinalco would attempt a full takeover of Rio Tinto. Mr Xiao held talks with the Minister for Resources and Energy, Martin Ferguson. Chinalco and the US-based Alcoa bought a 12 per cent stake in Rio in an after-market share raid in London last week for $16 billion. The move has complicated BHP Billiton's hostile bid for the world's third-largest mining company. Mr Yang, who yesterday met the Prime Minister, Kevin Rudd, and the Foreign Minister, Stephen Smith, said Chinalco's investment complied with market rules and was a common-sense business decision."This is an independent decision made by the two companies, one Chinese and one American," he said. "I guess it is part of the two companies' development strategy." Mr Smith said the Government remained committed to Chinese foreign investment but the purchase was before the Foreign Investment Review Board, which could still require it to be approved by the Treasurer, Wayne Swan. "Ultimately the decision - is this investment in the national interest or not? - is the guiding light as to matters of this nature, irrespective of whether the source is from China, the United Kingdom or the United States," Mr Smith said. "I regard as much more important to the Australia-China relationship Australia's capacity to be a long-term, reliable and secure supplier, rather than a particular issue about investment in respect of which the Treasurer may be called upon to make a national interest decision."Mr Yang said China was "very open-minded" and had expressed no concerns that Australian companies had invested far more in Chinese companies than the other way around."We should like you to double or even triple your investment in China," he said."We think it is good for you and it is good for us. So let's set our eyesight high and look into the future to see what we can do in the future together."Mr Xiao told the Herald earlier this week that the Chinese Government was not planning a takeover and the stake in Rio Tinto was purely a "strategic financial investment".
© 2008 Sydney Morning Herald