by Xinhua writers Cao Xiaofan and Shen Rufa
XIAMEN, Sept. 9 (Xinhua) -- Australia is willing to attract more Chinese investment and deepen bilateral economic cooperation in energy and resource sectors despite previous "ructions" caused by the Rio Tinto case, Jeff Turner, deputy consul general and senior trade commissioner with the Australian Trade Commission (ATC), told Xinhua Wednesday.
In the past months some, analysts have expressed fears that Chinese government-owned companies could bypass Australia in retaliation for the failure of a tie-up deal between Rio Tinto and state-owned Chinalco, and the detention of employees of Anglo-Australian mining giant Rio Tinto on spying charges.
"The Rio Tinto case has challenged the bilateral relations, but I believe the two countries' governments can smoothly handle the problem. Although we have different political mechanisms and cultural background, we are trying to understand each other," Jeff Turner said when attending the Australia-China Fortune Forum 2009 (ASFF) in Xiamen, Fujian Province.
PROSPEROUS ENEGRY COOPERATION
A total of 16 Australian energy enterprises and investment companies including Advent Energy Ltd, Flinders Mines Ltd, and Martin Place Securities, participated in the ASFF 2009 Wednesday, seeking investment cooperation in energy and resource fields from Chinese entities.
"Programs promoted in this forum are mainly in energy and resource sectors, where Chinese government has encouraged the domestic enterprises to invest in," said Yang Min, Chairman of the Board with Martin Place Securities.
Data from the Foreign Investment Review Board (FIRB) showed that Chinese investment interest in Australia is on a strong upward trend, while investment in resource projects dominates Chinese FDI in Australia by value as of 2008.
China ranked the 13th largest foreign investor of Australia in 2008, with a total investment stock of 7.897 billion Australian dollars (6.83 billion U.S. dollars), rising 26.7 per cent over the same period last year. "Australia's rich resources and China's soaring demand has driven economic cooperation between the two nations, and we expect to attract more investment from China," said Owen Hegarty, Executive Chairman of Hong Kong listed G-Resources Group Ltd.
EASIER ACCESS TO INVESTMENT
The global financial crisis offers Chinese companies good opportunities for investing overseas, as investment costs have reduced because of lower asset prices and a loosening of investment rules in many countries, Chai Haitao, head of the research institute in the Department of Foreign Economic Cooperation of the Ministry of Commerce, said in mid August in a financial forum in Beijing.
Australia Federal Treasurer Wayne Swan announced on Aug. 4 reforms to foreign investment review laws that will reduce compliance costs.
The main change is to increase the threshold below which deals can proceed without a foreign investment review - overseas businesses buying a stake greater than 15 percent in companies valued below 219 million Australian dollars can now proceed without review, according to Turner.
"It will become easier for Chinese companies to invest in Australia. And the two nations will become more economically integrated in the next five to ten years," said Turner.
A report from the United Nations Conference on Trade and Development (UNCTAD) showed as of June 2009, the G20 major economies have rolled out 40 regulations on guiding foreign investment after the global credit crunch broke out, most of which aimed at optimizing overseas investment environment by lowering the market threshold and opening new fields.
¡¡¡¡WARMER CHINA-AUSTRALIAN TIES
Australian uranium explorer Energy Metals announced Tuesday it had received an 83.6 million Australian dollars takeover offer from China's state-owned China Guangdong Nuclear Power Holding Co.(CGNPC). The Perth-based uranium explorer said its board had unanimously backed the bid, which would sell CGNPC 70 percent of the company.
Baosteel Group, China's largest steel maker, agreed to pay 285.6 million Australian dollars for a 15-percent stake in Australian miner Aquila Resources on Aug. 28.
"Chinese companies' investment has not harmed Australia's economic security, and in fact, their sound performance has enhanced their reputations," said Turner.
Chinese enterprises also showed strong interest in investing in Australia. "We've long been seeking investment opportunities in energy, and electromechanical manufacturing in Australia, and hope to conduct a prosperous cooperation in these fields with Australian partners," said Wang Jianmin, broad director of Fujian Gangfa Group Co..
POSITIVE INVESTMENT SUPPORT
The Chinese government began to encourage domestic enterprises to invest abroad in 2000.
In April, China released an investment guidebook to help domestic firms make foreign investment. In the wake of that, the State Administration of Foreign Exchange publicized a draft regulation which would simplify examination and approval procedures for domestic companies' investment abroad to solicit public opinion in May.
A joint report released Tuesday by the Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange Tuesday showed Chinese overseas direct investment(ODI) added up to 183.97 billion U.S. dollars by the end of last year.
"We will see a brighter future in bilateral economic cooperation, and the two nations can even make joint exploration in the mining market in Latin America," said Turner. (Xinhua reports Yuan Qing, Wang Xi also contributed to this report)
