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FIRB and China Inc...

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Attack dog retreats on China investment...

Yes, I know I have been on and on and on this China investment for a friggin' long time... I know. And I know not many people like this kind of drivel, but then if you can look further than this petty parochial OZ vs China mentality and see them as our new future financier for our mining industry and jobs and a better economy, then, at a min, there's no need of such stupid maneuvers as described in this news from Swan's department.

Which brings to the question - how much Chinese "true friend" Kevin Rudd meant the last time when he was in Beijing lecturing the Chinese on Tibet? In my eyes, this guy wears a "I'm a Chinese expert" label on is head but in reality and in action, he is behaving like a buffoon when come to dealing with the Chinese - from not wanting to sit near an ex-Chinese ambassador to Oz on TV interview to his proposal of wanting to act as a leader in an Asian-Pacific grouping including China, the USA, Japan, etc... very clownish and very childish.

An expert? Nah!

(...he won't be getting my vote in the next election, I can assure you)

Back to the question of future Chinese investment that potentially could mean many jobs to Aussies, with the current policy not changing and is continually projecting a discriminatory attitude towards the Chinese, I am not so sure if the Chinese will still take it sitting down. And if I read them right, they will hit back, in one way or other.

Just wait and see, esp on how they conclude their deal with RIO, and possibly BHP... this should serve as a litmus test.

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  1. haunting's Avatar
    Here is another write-up on why the Chinese butt deserves to be kicked - like it or not, the Chinese should swallow what Australia has dished out...

    Fair point and no argument on this. It's just this minor point I have been raising all these while - if and when China decides not to deal with RIO and channel all their purchases to Vale; or simply, reduces RIO's share of the iron ore they buy normally, I guess we will have no choice but to swallow what they dish out to us.

    Whilst it is fair that Rio has the right not to sell to Chinalco, or choose whom it likes to deal with. It would be equally fair to assume the Chinese has their right in dealing with someone they feel comfortable with.

    Let's hope they won't go that far, but if/should they do, I guess someone over here will have to learn to swallow like the Chinese. But I won't be surprise by then I will read a whole lot of different slant from the local media brains.

    It really bugs me to learn this is how we deal with our biggest customer where the stake is so high and the real benefactors of the RIO/Chinalco "no-deal" are really the big UK funds and overseas investors; whilst the real casualties are the local mining contractors/sub-contractors/workers and the regional govt.

    I think its a high price to pay, esp considering the damage to the goodwill between the two countries. Let's hope no one here will live to regret this "right call".
  2. haunting's Avatar
    Keating urges positive China stance

    The former prime minister Paul Keating has warned against Australia taking a defensive stance towards China.

    Mr Keating has taken a swipe at the Federal Government, saying its defence white paper makes ambivalent references about China.

    Speaking at Curtin University in Perth last night, Mr Keating said China's dominance would be inevitable, because the world's greatest economies have always become strategic powers.

    But the former prime minister said this would be positive for the region and there would be opportunities for Australia.

    Mr Keating said that unlike previous prime ministers, he always believed the rise of China was certain.

    "This great state, with its profound sense of self and the wherewithal to make a better life for its citizens - 1.3 billion of them - has eased itself into a major role in world affairs," he said.

    "A role which I believe will be an altogether positive one for the world."

    Australia would need to make adjustments, as China would not allow itself to be cast as a client of the US...
    ** PK is the man with real guts when he was the Treasurer, the PM and now in speaking up what is really important for Australia. Not too long ago (about 1 year ago) Krudd has proposed APAC to the Asia-Pacific region but the plan was shot down by the USA. The reason was simple - there's no way China will want to continue serving as a client state to the USA at these days and age.

    Japan may want to be one and doesn't mind. S.Korea may want to be one. Australia? Seems to be fighting/wanting to be somebody's lapdog, from not wanting to live independently as a Republic to wanting to be the Far East Sheriff of the USA... it's not so bad if in bad times, the US and the UK would look after us. But fact and reality are when the UK decided to devalue their currency, they did it without giving Australia a chance. When USA was negotiating in WTO, and FTA with Australia, they hardly gave a damn to Australia's well being. It's all about their own self/national interest. The thought of Australia being their good mate never seems to matter a bit... silly? Blind? Dunno... I just hope one day Australia can see herself clearly in a mirror and decide once and for all, the first and foremost endeavour as a people and a country is to look after her own self interest first.
  3. haunting's Avatar
    What a mockery!

    If you have time, go check back a month or two and read about those people who were hiding behind their "national interest" cries in the Rio-Chinalco deal. Can't blame my cynicism here. And can't blame me for bringing this up again because these people when come to putting their (shallow and empty?) words into deed, they are grossly falling short!

    ... by 7,865,410 counts!
  4. haunting's Avatar
    Read about it.. click me!

    Australia's foreign investment regime has a national interest test -- in fact that is its only test. Foreign investment applications must be approved unless they are found to be contrary to the national interest, and that decision is the responsibility of the federal treasurer. The FIRB makes recommendations but it is only an advisory body, and treasurers can, and have in the past, gone against recommendations of the board.

    The foreign investment legislation contains no definition of the national interest. It is whatever the treasurer of the day decides it is on applications before him.

    That can lead to contradictory decisions, creating uncertainty among overseas investors...
    ** it is more than a necessity to review FIRB because in the next few years, bulk of the FDI coming into this country, especially in the mining sector will be from the Chinese SWF, which is seen by a large section of the Australian population to be a direct arm of the Chinese state and by this definition and fear, any Australian assets sold would translate into selling out Australian interest to the China... this will be a political nightmare for both major parties because without the Chinese FDI/SWF, the mining sector will be taking a big hit, especially in the low end of the sector where funds are likely to become expensive or "extinct" - the impact on job will make a big dent on the national economy, that's a guarantee.

    The earlier they begin work on FIRB rules, the more transparent they make it to outside interest, the better. It's in Australia's interest to get this done expediently as time is running out fast, and when all the signs are indicating the global econ recovery will not happen just yet, and with a budget deficit of 200b starting down the current govt, I am quite sure they want and need all the help they could get to alleviate this financial burden asap... before the next election!
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