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SHANGHAI -- Australian Trade Minister Simon Crean has said the country welcomed foreign investment into its mining sector and was keen to expand its trade ties with China.
Mr Crean said Australia was open to Chinese investment providing it was in his country's national interest, adding that he was particularly eager to expand mutual service and capital flows.
"Our foreign investment guidelines are non-discriminatory against any country," Mr Crean said in a speech to the Australian Chamber of Commerce in Shanghai.
"It's also about Australian investment in China and improving market access. We have got to push for further liberalisation."
China's miners and steelmakers, which foresee a construction boom lasting decades and want to ease their reliance on resource sector heavyweights BHP Billiton and Rio Tinto , are looking to buy mining assets in Australia to lock in supplies of raw materials such as coal and iron ore.
Mr Crean's qualified welcome could be good news for Chinese investors such as Shenzhen Zhongjin Lingnan Nonfemet Co Ltd , which is bidding jointly with Indonesia's PT Antam for Australian miner Herald Resources Ltd, and state-owned MCC Mining, which has applied to buy a $400 million iron ore project from Cape Lambert Iron Ore Ltd .
Other firms that plan to invest in Australia include top coal miners China Shenhua Group and China Coal Energy .
But the government of Prime Minister Kevin Rudd has spelled out that no company judged to be the vehicle of a foreign state can buy Australian shares without approval from Australia's Treasurer, after a review by its Foreign Investment Review Board.
Government Clearance
Earlier this month, China's No.6 steelmaker Shougang Group was rebuked by Australian regulators who judged it was behind two firms that were building up an large stake in Mount Gibson Iron Ore Ltd without making a formal bid.
China's state-owned aluminium major Aluminum Corp of China teamed up with Alcoa Inc to buy a $US14 billion stake in Rio Tinto earlier this year, but it bought only London-listed shares, since buying the Sydney shares would need government clearance.
Investment bankers say Australia is likely to welcome Chinese investment if it means accelerating projects by building infrastructure and ramping up production targets, and China is keen to do so because the price of iron ore has jumped five-fold since 2001, while coal prices are more than twice last year's levels, powered largely by strong demand from China.
That has spurred Chinese steelmakers to band together to negotiate term iron ore prices, while Chinese ministries have on occasion intervened to limit spot imports.
"It's a commercial issue. No one likes to pay high prices," Mr Crean told Reuters after his speech.
Mr Crean added that he hoped to increase the frequency of talks with China over a free trade agreement, depending on the outcome of the next scheduled talks in June. The two countries signed an FTA framework in October 2003 and talks began in May 2005.
Australia, a top grains, meat and wool producer, is eager to get access to markets in China, which currently barely meets grains and meat demand for its increasingly affluent population.
But Australia does not want to be simply a resources supplier.
The talks would also focus on better access for Australian goods and services, non-tariff barriers, intellectual property rights and government procurement, Mr Crean said, but added that no timetable had been officially set.
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