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Chinese firms still pursuing Aussie investment
By Wu Zheng |
00:00 UTC+8 June 30, 2009
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I was pleasantly surprised when I read the morning newspaper at my hotel in Canberra during a recent visit to Australia: three out of the four stories on the front page of its business section had something to do with China.
I was surprised because it was unusual, based on my past overseas experiences, to read so much about China in a foreign newspaper on a single day and all on the same page, particularly as the topics were not related to stories of the likes of human rights or Tibet.
I was pleased because the stories proved that, in spite of recent acrimony after a major Chinese company was spurned in a deal to buy shares in an Australian mine, Chinese firms were not deterred in their pursuit of further initiatives and the ties between China and Australia seemed set to grow stronger.
One of the stories reported that China's US$200 billion sovereign wealth fund, China Investment Corp, had committed US$200 million to a financing facility for the Goodman Group and may emerge with a substantial shareholding in Australia's biggest industrial property trust.
Another said BHP Billiton expected to export its first uranium to China this year and flagged China as the major buyer of its uranium in years to come.
The headline news, speculating on the possible sale of iron ore assets owned by Rio Tinto and BHP Billiton if they wanted their merger deal to pass regulators, said China had stepped up its campaign to flex anti-monopoly law on the proposed BHP-Rio joint venture.
In fact, this merger deal, opted for by Rio Tinto shareholders rather than proceeding with accepting Chinese aluminum giant Chinalco's bid, was raised in almost every conversation I had during my week-long tour "down under."
Visiting courtesy of a media program sponsored by the Australian Government's Department of Foreign Affairs and Trade, I was able to talk to ministers, trade officials, lawyers, researchers, journalists and meet people on the street: all had a view on the Australia-China relationship.
"Short-sightedness? Commercially, maybe. Political prejudice? No," said Malcolm Cook, a researcher at Lowy Institute, an independent think tank for international policy. He was asked to comment on a Xinhua editorial criticizing the rejection of China's buying offer.
He explained that it was Rio's shareholders, the majority of whom are not Australians, who voted against the offer before the Australian government completed its review process.
A sharp observer of China, Jim Harrowell, partner of law firm Hunt & Hunt who has helped his clients with their business activities in China since the 1980s, said there was no reason for Australians to worry about Chinese bidders as State-owned enterprises.
"To put some balance in it, we have to remember when Qantas started to fly to China, it was a State-owned company. When Telstra first went to China, it was a State-owned enterprise. When the Commonwealth Bank went to China, it was a State-owned enterprise.
Now, they are all privatized. Things change.''
The level of investment by China in Australia relative to other countries is still low. And when viewed alongside trade flows, the Chinese investment has been modest, according to figures provided by Australian Trade Commission, better known as Austrade.
By the end of 2008, the accumulated stock of investment from Chinese mainland in Australia stood at A$7.9 billion (US$6.3 billion), making it Australia's 13th most important foreign investor.
In contrast, in 2008, two-way trade reached A$67.7 billion, making China Australia's No. 2 trading partner, second only to the United States.
The strong trade ties and stable political relationship benefit both countries and their people.
"The relationships are at so many levels," observed Kim Carr, Minister for Innovation, Industry, Science and Research.
Even back to trade, it never happens one way, as I found in my search for "authentic" made-in-Australia UGG boots during my stay.
In Shanghai, there are no authorized outlets selling the famous Australian sheepskin boots and people here tend to get them from Taobao.com (China's equivalent to eBay.com), where sellers claim their products are "authentically Made-in-Australia" but we all know they are from China.
When I got the chance to shop, the shop assistant showed me two varieties. The cheaper one is "100 percent made-in-Australia" while the one with a label saying "made-in-China" is twice as expensive, because "the quality is much better," according to the shop assistant.
So what happens is Australians ship the wool to China, Chinese factories turn them into shoes and ship them back to Australia. And there was I, getting a pair in Australia and bringing them back again to China.
Trade, as it turns out, is never a one-way street.
I was surprised because it was unusual, based on my past overseas experiences, to read so much about China in a foreign newspaper on a single day and all on the same page, particularly as the topics were not related to stories of the likes of human rights or Tibet.
I was pleased because the stories proved that, in spite of recent acrimony after a major Chinese company was spurned in a deal to buy shares in an Australian mine, Chinese firms were not deterred in their pursuit of further initiatives and the ties between China and Australia seemed set to grow stronger.
One of the stories reported that China's US$200 billion sovereign wealth fund, China Investment Corp, had committed US$200 million to a financing facility for the Goodman Group and may emerge with a substantial shareholding in Australia's biggest industrial property trust.
Another said BHP Billiton expected to export its first uranium to China this year and flagged China as the major buyer of its uranium in years to come.
The headline news, speculating on the possible sale of iron ore assets owned by Rio Tinto and BHP Billiton if they wanted their merger deal to pass regulators, said China had stepped up its campaign to flex anti-monopoly law on the proposed BHP-Rio joint venture.
In fact, this merger deal, opted for by Rio Tinto shareholders rather than proceeding with accepting Chinese aluminum giant Chinalco's bid, was raised in almost every conversation I had during my week-long tour "down under."
Visiting courtesy of a media program sponsored by the Australian Government's Department of Foreign Affairs and Trade, I was able to talk to ministers, trade officials, lawyers, researchers, journalists and meet people on the street: all had a view on the Australia-China relationship.
"Short-sightedness? Commercially, maybe. Political prejudice? No," said Malcolm Cook, a researcher at Lowy Institute, an independent think tank for international policy. He was asked to comment on a Xinhua editorial criticizing the rejection of China's buying offer.
He explained that it was Rio's shareholders, the majority of whom are not Australians, who voted against the offer before the Australian government completed its review process.
A sharp observer of China, Jim Harrowell, partner of law firm Hunt & Hunt who has helped his clients with their business activities in China since the 1980s, said there was no reason for Australians to worry about Chinese bidders as State-owned enterprises.
"To put some balance in it, we have to remember when Qantas started to fly to China, it was a State-owned company. When Telstra first went to China, it was a State-owned enterprise. When the Commonwealth Bank went to China, it was a State-owned enterprise.
Now, they are all privatized. Things change.''
The level of investment by China in Australia relative to other countries is still low. And when viewed alongside trade flows, the Chinese investment has been modest, according to figures provided by Australian Trade Commission, better known as Austrade.
By the end of 2008, the accumulated stock of investment from Chinese mainland in Australia stood at A$7.9 billion (US$6.3 billion), making it Australia's 13th most important foreign investor.
In contrast, in 2008, two-way trade reached A$67.7 billion, making China Australia's No. 2 trading partner, second only to the United States.
The strong trade ties and stable political relationship benefit both countries and their people.
"The relationships are at so many levels," observed Kim Carr, Minister for Innovation, Industry, Science and Research.
Even back to trade, it never happens one way, as I found in my search for "authentic" made-in-Australia UGG boots during my stay.
In Shanghai, there are no authorized outlets selling the famous Australian sheepskin boots and people here tend to get them from Taobao.com (China's equivalent to eBay.com), where sellers claim their products are "authentically Made-in-Australia" but we all know they are from China.
When I got the chance to shop, the shop assistant showed me two varieties. The cheaper one is "100 percent made-in-Australia" while the one with a label saying "made-in-China" is twice as expensive, because "the quality is much better," according to the shop assistant.
So what happens is Australians ship the wool to China, Chinese factories turn them into shoes and ship them back to Australia. And there was I, getting a pair in Australia and bringing them back again to China.
Trade, as it turns out, is never a one-way street.
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