China Gives Hero Status To The Rio Tinto Raider

The Age

Tuesday March 11, 2008

John Garnaut, Asia Economics Correspondent, Beijing

RIO Tinto's largest shareholder, Chinalco, is blitzing the domestic media to defend and exploit its lightning raid on the Anglo-Australian miner.

Chinese publications have in recent days treated Chinalco president Xiao Yaqing to the copious, glowing coverage that it usually reserves for the country's top politicians.

In interviews, reports and opinion commentaries, Mr Xiao holds the Rio deal as evidence that his company is a sophisticated national champion that can compete in the ruthless world of high finance and defend China from surging commodity prices.

Communications experts in Beijing say Mr Xiao is capitalising on China's rising Olympic-year nationalism, along with the country's acute sensitivity to being exploited by global mining giants.

Scott Kronick, president of Ogilvy Public Relations in China, said Chinese executives were fast discovering the importance of good publicity.

"The Chinese understand the power of the press and we are seeing this come through in a variety of ways," he said.

Nevertheless, Mr Xiao's publicity blitz seems to have obliterated what was previously a golden rule of Chinese business survival: keep your head down.

"I have never seen this before," said another director of a communications company. "It goes against every bureaucrat's instinct in China - usually they run a million miles."

Chinese observers note Mr Xiao's media bombardment has coincided with the biggest political event of the year, the National People's Congress.

Yesterday he received another glowing report, this time in the main Communist Party mouthpiece, the People's Daily, following vast spreads last week in leading business magazines such as Caijing.

Last week, on the opening day of the congress, the People's Daily ran a 1250-word opinion piece from Mr Xiao that extolled the success of his bid for 9% of Rio Tinto.

"Chinalco must go international," he wrote. "This is the largest investment overseas in the history of China's aluminium industry and the history of Chinese enterprises.

"It is also the biggest sum share trading project in the world, which amounted to $US14.05 billion."

Mr Xiao wrote that his company had won global support because it had consulted widely, including with foreign governments.

© 2008 The Age

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