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Rio Tinto chief backs China foreign investment in Australia
Sydney (AFP) June 16, 2008 Rio Tinto chief executive Tom Albanese backed greater cooperation between China and Australia on resources investment Monday, saying Canberra should not fear government-backed foreign investment funds. Amid official predictions that Chinese investment in Australia could triple to 30 billion dollars (28.2 billion US) this year, Albanese said foreign money was needed to fully develop Australia's resource assets. "Most of us agree that unlocking the full force of Australia's mineral potential will require direct foreign investment," the head of the Anglo-Australian resources giant told a business function in Sydney. "That's why I believe the best approach is one that is based not on short-term fear, but is considered, prudent and focused on the opportunity." Chinese interest in Australia's resources sector has lifted as it seeks to secure supplies for its rapid economic expansion, with Beijing's Sinosteel on the verge of completing a hostile takeover for iron ore miner Midwest. China's state-controlled aluminium company Chinalco also combined with Alcoa to buy a nine percent stake in Rio Tinto for 14 billion US dollars in February in response to BHP Billiton's 147 billion US takeover offer for the firm. However, there have been reports that Canberra has advised some potential Chinese investors to delay takeover applications as it considers whether it wants sovereign wealth finds to control a large slice of its resource base. Treasurer Wayne Swan said on a visit to China last week that Australia's foreign investment policy was non-discriminatory and aimed to ensure decisions were driven by market forces -- not external strategic or political considerations. Albanese said sovereign wealth funds, such as those from China, presented few direct threats to the global financial system. "I support comments made by the Federal Treasurer Wayne Swan last week that sovereign funds present few direct threats to the global financial system and I support his call for cooperation between Australia and China on this subject," Albanese said. Finance ministers from the Group of Eight rich nations said last weekend they recognised the benefits of sovereign wealth funds but encouraged them to work with the International Monetary Fund to improve transparency. Community Email This Article Comment On This Article Share This Article With Planet Earth
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