Australia Suggests Joint Ventures To Chinese Investors

The Age

Saturday August 23, 2008

John Garnaut, Beijing

RESOURCES Minister Martin Ferguson has told Chinese company leaders to bypass their advisers and come "directly" to Canberra to discuss their investment plans.

He gave the clearest guidance to date on how the Government would prefer Chinese companies to invest in the Australian mining industry, suggesting they follow the "Japanese model" of joint-venture partnerships.

"I think our experience ... with Japan and also other countries such as Korea represents a good investment model in Australia," he said in Beijing.

"I've been talking to a number of Chinese companies about that particular approach, about strategic partnerships with Australian companies."

Since Chinalco's raid on the Rio Tinto share registry in February, the Australian Government has quietly moved to discourage Chinese hostile takeovers and large investments that could give Chinese companies control or management influence over established Australian mining companies.

Mr Ferguson has met several potential Chinese investors during his Beijing visit, including the chief executive of coal mining giant Shenhua.

He said Australia was "open to investment" and that he wanted to help Chinese companies navigate Australia's foreign investment rules and other regulatory barriers.

"They've got to operate on the basis that they are key investors in Australia, they're no different to a Woodside or a BHP Billiton or a Rio Tinto or an Xstrata," said Mr Ferguson.

"If they want to make substantial investments in Australia, then they are entitled to see me and my department.

"I think that was well received, you don't need a middleman to invest in Australia."

Mr Ferguson and Trade Minister Simon Crean are also using Australia's investment rules as leverage to open up China's tightly controlled resources sector during free trade agreement negotiations.

"We regard these issues as central to ... a free trade agreement," he said.

Mr Ferguson was also in China to spruik Australia's willingness and capacity to sell liquefied natural gas and uranium to China.

He said he was "delighted" with a recent ERA contract to sell uranium to China and said the Australia-China nuclear safeguards agreement was "the most rigorous bilateral we've got with any country".

Mr Ferguson, who is also Minister for Tourism, was also in China to promote Australia's merits as a tourist destination.

He said the number of Chinese tourists each year could nearly triple from 358,000 to amillion within 10 years.

"Over time, China is potentially our biggest market, though I'm also closely watching India," he said.

© 2008 The Age

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