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(generated from captions) what the Productivity like 275 million a year. So

Commission are recommending we

wait five years before any

other reform, Australian public

will pay billions more for

books than we believe they need

to. Garth, let me talk to you

about the New Zealand industry.

Parallel import restrebzs were

lifted in 1998, a report in

2004 found no evidence it had

2004 found no evidence it had

an adverse affect and exports

of New Zealand books are up.

Why would the Australian

situation be different. That's

one report, it's important to note there's conflicting

evidence, a lot of evidence

saying book prices won't go

down, in fact the submission to the Productivity Commission

from the biggest book seller in from the biggest book seller

New Zealand, the former

Whitcall's group said prices

hadn't gone down, New Zealand

has an open market, prices have

gone down, they lost the

publishing industry. If you

look at the submission - if you

want the full picture look at

the submissions on the the submissions on

Productivity Commission's web

site. There's lots of

conflicting bits of data, lots

of price comparisons, it's

important to note too, who is

pushing for this, some people pushing for this, some

have been talking about it, the

have been talking about it, the

Coalition for cheaper books led

by Dymocks in the past who have

been friends of Australian

authors and booksellers seem to

be opposed to us. Against that

there's all the Australian publishing association. The

Australian booksellers

association, booksellers don't

want this, the Australian

society of authors, the

Coalition for cheaper books is

Kmart, Big W, Woolworths,

Target and Dymocks, giving you

a clue about the real mote igss

for this are. The evidence that

- motivation this are. There's

evidence New Zealand is not

cheaper, and if they source

cheaper books from ind with or

the US equivalent or whatever,

those -- India, or US

equivalent. That those cost

savings will be pass said on. If you are

on. If you are motivated by

altruism, why not cut altruism, why not cut your

prices now and take less of a

profit. In some types we do. Australian booksellers are

having to compete with

international websites day in

day out. That's what's

different about this debate

than 5-6-7 years ago, customers

are shopping in an open market,

a lot on international websites

that Australian booksellers are

on, and we are trying to

compete with those people.

Harry Potter is a good example,

Dymocks chose to be competitive

with the international scene.

Amazon and others delivered to

Australian customers at a

cheaper price, we do shave

margins already. The fact is I

don't - everybody - the great

number of the submissions from

number of the submissions from

publishers and authors and the

like, I have never seen anybody

who is the - who has the when

fit of a restriction, want to

see it removed. You are clearly

- what we tried to do is bring

the most important people in

this debate to the forefront,

that's the customers. I don't

mind as a Chief Executive of

retail business being in a

retail business being in a

competitive environment. I have

to compete f I overcharge for

my products, my customers will

not shop for me, it's as simple

as that, if product are

available at better wholesale

prices from overseas, as a

retailer in this country, I'll

be forced by consumer demand to

actually make sure my prices

are as low as they can be. Garth, my point about

people going on to Amazon, I

can buy books cheaper than in

Australia, have them shipped

here, it's less than buying

them here, doesn't it show the

focus that your lobby group and

people supporting your argument

are having is on an argument

that's lost, we are already in

a global market. Except we are

not, the Americans and British

are not opening their markets,

people are going to Amazon to

buy the books it's about the

currency, where the Australian

dollar is, whether books are

cheaper, more expensive, it's

down to the exchange rate. We

are saying that if we open the

market we know that there'll be

a tremendous negative impact

upon Australian authors,

publishers and the printing

industry, jobs will be lost,

opportunities will be lost,

there's no firm evidence that

we would get the cheaper

we would get the cheaper books

don't worry about the promised. It will be cheap,

cost. These are the same

arguments we heard when

parallel imports where lifted

on CDs. The ACCC found the

price of CDs dropped by price of CDs dropped by 40%,

and the local music industry is

thriving, why would the book

industry be different. Music is

not the same as books, there

was a tech nologic am

revolution that occurred. The

changes to the Act began at the

time down loads began, the

change in pricing and habits

happened because of the

technological change and the

market is open. You cabinet

people like Professor Allan

Fels saying it's fine. If you

talk to musicians, they are not

saying it's better. What

happened to the mid range music

shops that used to be there,

they have gone. Maybe the total

dollars are the same or better,

is it better for an Australian

musician, for Australian

creators, that's what we are

talking about. If the Americans

and British opened their

markets, we'd have a good

argument. Why should Australia

open its market when it's not a

level playing field

level playing field and nations

like the United Kingdom, US and

Canada haven't opened

theirs. We don't see the

opening of the market will do

anything to publishers or

authors that can produce the

goods, and can be goods, and can be competitive.

I don't believe the Australian

public should pay more for

books to subsidise

incompetence. Let's take the

white tiger, last year's Booker

white tiger, last year's Booker

prides winners are on figures

from December it was $32.95.

$22 in the US. Why should Australian consumers be Australian consumers

satisfied with that, it's a

book set in India by an Indian

based author, why is paying an

extra 11 to do with the

Australian mark Booksellers

could bring it in and sell it.

If they get it cheaper

If they get it cheaper they

should sell it cheaper, why

aren't they doing if they can

already? Do we want to be a

nation of consumers, Tom Kin

eely coined the phrase, a news

agent nation, where all we do

is buy stuff, do we want to

create things. While there may

be minor price differences,

there's no clear evidence that there'll

there'll be promised price

reductions from heaven. But we

know we'll lose publishing

industry to a large degree. New

Zealand is the only country

that has done this. They had a

small publishing industry, they

don't have cheaper prices or a

publishing industry. Don Grover

are we sacrificing, we get

cheaper books, at what cost

will that be, do we sacrifice

stories about our culture? No,

it's undervaluing the it's undervaluing the customers

buying the books. They want the

book, Australian product.

They'll continue to demand it. There'll be businesses in

Australia that will stand up

and provide those books.

Publishers today do not publish

uncommercial product. The

average author, according to

the Australian society of

authors earns $11,000

authors earns $11,000 a year.

To be perfectly honest, this is

about a few authors doing well.

I don't buy it, Australian

buyers want great Australian

content. Dymocks as a book

seller will bring it to them. seller will bring it to them. I

can be sure of one thing, the

threat of us purchasing books

at cheaper prices will improve

the performance of publishers

in this market and lower the

prices. We are out of time,

thank you to both of you for

coming in, we really appreciate

it. Barack Obama won a fresh

commitment from the leaders of

Pakistan and Afghanistan to

boost the fight against

Al-Qaeda, and the Taliban, in

return the US President pledged

unwaivering support for the

Pakistani and Afghan

governments, the words may have

been warm, tensioning on the ground overshadowed ground overshadowed the White

House talks, there's a looming

refugee crisis in Pakistan's

north-west. US aircraft have

been blamed for the deaths of

scores of Pakistan

individuals. High stakes

diplomacy for a highly

dangerous part of the world. We

need today as three sovereign

nations joined by a common goal - to

- to disrupt, dismantle and

defeat Al-Qaeda, and extremist

allies in Pakistan and

Afghanistan, and prevent their

ability to operate in either

country in the future. It was a

point Mr Obama stressed in his

meeting with Afghani and

Pakistani counterparts, they

too agreeing cooperation is

vital. This is a cancer that

needs to be done away with.

Pakistan carries a huge burden

confronting Taliban and

Al-Qaeda together. Pakistan

and Afghanistan are conjoined

twins, our suffering is shared,

our joys are always shared. The

challenges facing the US in the

region have been highlighted by

the deaths of dozens of Afghan

civilians in what locals say was a US air

was a US air strike. I wish to

express my personnel regret and

certainly the sympathy of our

admission on the loss of

civilian life in

Afghanistan. The meeting took

place against the backdrop of a

new Pakistani army offensive in

the Taliban infiltrated the Taliban infiltrated Swat

where are, tens of thousands

forced - Swat Valley, tens of

thousands forced to flee,

thousands forced to flee, it

could reach a million. Coming

after the collapse of a peace

deal between the Government and

the Mill tants. The Taliban did

not live up to their end of

the bargain, they didn't disarm

they took more territory, we

see a response now from the

Pakistani military, it's a good

thing, it's not enough. Senior

US officials busily set

expectations ahead of the union. The union. The relationship between

United States and Pakistan,

going back to the birth of

Pakistan as an independent

nation is a complicated

relationship between allies who

have misunderstood each

other. It will deepen other. It will deepen with

President Obama pressuring

Pakistan to step up the fight

against the Taliban. A

against the Taliban. A leading

concern is Pakistan's obsession

with India and the threat to

the east to the detriment of

focussing on the threat to the

west and internal threat. A

change in focus requiring big

changes to the army

itself. What the Pakistani

military needs to do is purge

its own ranks of some of the

extreme Islamists, not only

from the intil gens arm but

from the intil gens arm but

other ranks as well. -

intelligence arm but other

ranks as well. In the course of

doing that noble it to focus on

the feeding Taliban and hideout

in the hold-outs they have in

the mountainous regions and

borders of Afghanistan. It

won't be enough to quell

concerns about Pakistan's

nuclear powers falling into the

wrong hands. I think right now

we have to be looking at the

question whether we would take

steps to secure some of those

weapons, if to so, how to do

it. I do not underestimate the

risks involved, spals as

estimates of the nuclear stockpile range between 50 and

stockpile range between 50 and

200. With the situation

getting volatile the Asif Ali

Zardari battle faces a battle

against time. They have weeks

or months. The White House

meeting underscores President

Obama's determination to

prevent Pakistan slipping into

chaos, diplomatic efforts will

continue and the American air

strikes on militant strikes on militant strongholds

in the north-west. Events on

the ground may be out the ground may be out of Mr

Obama's control. Now for the

weather, morning showers in

Melbourne, Hobart and Sydney,

showers across the Top End and

tropical Queensland, dry and

warm in the west. That's all from us, Lateline from us, Lateline Business

coming up in a moment. If you'd

like to look back at the

discussion with Garth Nix

discussion with Garth Nix or Don

Don Grover, oreview any

transcripts, visit the web site at at abc.net.au/lateline. Now

Lateline Business with Ali

Moore. Smoke and mirrors, the

shock fall in u. Excites

market, but not the

experts. These monthly labour

market figures are volatile,

you can get the odd you can get the odd rogue

result such as today's. Out of

print - are newspapers in

terminal decline. What we have

seep happen in the last year is

the time frame that the

newspaper industry has to find

an economic model for

themselves in the online world

of communications has shortened drastically. Rio Tinto drastically. Rio Tinto talks

down the market as it talks up

its deal with Chinalco. The

market out there is

extraordinary volatile, there

is certainly views that would

say that the equity market have

run ahead of where the real

economy is. I think I would

prefer to not comment on the

deal in that sense. It's a

strong deal, with lots of

attributes, they've been well explained.

To the markets, Australian

shares closed at a six-month

lie. All Ords jumping 2%,

buoyed by gains in the miners,

ASX 200 closing in on the 4,000

mark, the rally showing no sign

of abating in the region, the

Nikkei surging 4.5%, Hong

Kong's Hang Seng rose for a

sixth straight day and the FTSE

up 2.5%. Telstra is expected

to announce tomorrow it's

appointed on insider as its

knew executive. David Thodey is the head

the head of enterprise and

Government and will need to use

that experience to repair the

telco's damaged relationship

with Canberra, analysts say

Telstra will need to find a way

to work with the Government in

the building of the broadband

net work. Thodey beat a strong field including chief financial

officer Jon Stanhope. As we

heard on

heard on Lateline, the fall in

the unemployment rate has taken

everyone by surprise, the

headline may be misleading, the

figures are highly volatile and

far from trusted by economists.

ABS numbers have a huge number

of error and most point to the

trend figures showing the

economy continues to shed

jobs. The green shoots of

recovery continue to sprout.

Yesterday it was stronger than

expected retail sales figures,

today employment, but with a

caveat. These monthly labour

market figures are volatile,

you'll get the odd rogue result

such as today. According to such as today. According to the

Bureau of Statistics, on a

seasonally adjusted basis

49,000 full-time jobs were

created, with part-time

employment falling by 22,000.

The number of people looking for work

for work fell, which took the

unemployment rate down 0.3 of a

percentage point. Howevers the

trend estimates which are a bit

like a company's underlying

profit tell a different story,

showing the unemployment rate

increasing every month since

last September. The lead

indicators indicates the trend

pointing towards a rise in the

unemployment rate, business

surveys, our confidence surveys

etc, so I think you have to

think about trends in a

situation like this, and on the

trend basis, the message still

remains the same. That may be

true, when employment figures

were released the Australian

dollar spiked and money market

interest rates rose suggesting

the end of the Reserve Bank's

interest rate cuts may be

getting closer, it's a view

shared by ICAP's senior

economist Adam Carr who

believes inflation is too high

for rates to keep falling. We

need to be confident that the

recovery when it comes is

sustainable. If the global

economy stable itses, domestic company stabilised, the company stabilised, the RBA

will have to hike

rates. Whatever the quality

some businesses are hiring,

such as Matteo's Restaurant at

Fitzroy in Melbourne. Proprietor Matteo Pignatelli

says he's been surprised how

busy he's been March similar

April is a good month, you have the Melbourne Food and Wine

Festival, you have the fash r

ut have the Comedy Festival,

you have the Grand Prix on and

there's Easter. While there's Easter. While the

Bureau of Statistics says

full-time employment bounced in

April, in the restaurant

business part-time workers are

in demand. Full time it's

difficult, you are locked in,

you have to give the hours, I'm

kaush. I'd be lying if I said -

cautious, I'd be lying if I

said it was great. It was an

issue occupying the mind of

many of Australia's leading

economists in Sydney as they heard from the

heard from the US Federal

Reserve San Francisco

President. The ranks of

underemployed is growing in underemployed is growing in the

United States. Underemployment

rate, a broad measure that adds

individuals working part time

for economic reasons to the

unemployment stands at 14.25%.

This is 6.5 percentage points higher than at

higher than at the start of the recession. A situation that has

been replicated in Australia as

more and more struggle to find

full-time work. For

rehabilitation on the numbers

and the rest of the numbers I

spoke to Juliette Saly at

CommSec. A 6-month high on the

market today. Did the

employment numbers have much to

do with that? Western higher before the employment

before the employment figures

were released. It's added to

the positive sentiment of the

day and immediately after day and immediately after the

figures were released we saw

the market jump by 2%,

unfortunately we unfortunately we weren't able

to sustain those gains, but the

market had a positive gain, the

miners definitely leading the

charge, that didn't have

anything to do with the jobs

numbers, more the fact we saw

impressive rideses on impressive rideses on the

London Metals Exchange, BHP Biliton

Biliton adding 5%, in terms of

the stocks affected by the

better than expected job

sentence, Sikh was up 11% to

$3.82, and a good rise to

Fairfax up 6.5%. What about

the News Corp result, the News Corp result, talking

about the media, did that have

an impact, especially an impact, especially with

Rupert Murdoch saying the Rupert Murdoch saying the worst

of the recession was behind them. It

them. It spurred on News Corp's

share price, News Corp up 9.5%,

$1.27, closing $14.56,

definitely a stand-out perform

ever, investors overlooked

dismal third quarter result and focussed on positive

comment. Talking about

overcoming or overlooking dismal

dismal results, Sims Metal

third quarter loss wasn't too

good, it doesn't seem to have

phased the market. It was a

good result. Up 8.5% to

$22.786789 it was on the $22.786789 it was on the fact

that will Sims - $22.78. It was

on the fact Sims was positive.

It slashed work force by 16% in

September. The fact we are

seeing a pick up in Ferris and

copper prices will improve Sims

chances of staying in the

market outperforming

peers. There was news from

Suncorp-Metway about how the

company plans to run off what

it sees as non-core risky

it sees as non-core risky parts

of the business, what do

investors make of that. We saw

a good run up from Suncorp, a good run up from Suncorp, one

of the best performers in the

banking sector, rising by 5%,

investors welcoming the news,

we heard from banking head

David Foster saying they David Foster saying they were

in the process of guaranteeing

bad debts. What the market

liked is the fact that both

these businesses will have

separate manage teams looking

after them, hopefully they'll

run down the bad debts over the

coming years. Finally BlueScope

Steel how did is it fare after the

the capital raising They were a

big performer, up 22% to $2.52.

It's completed the

institutional part of the its

capital raising, raising $790

million, the retail component

has been oversold. It would

have raised $2.7 billion,

analysts think this looks

positive, allowing BlueScope to

remove risk from the balance

book over the next couple of

years, it will outperform

peers. We had joble economic

initiatives spurring a demand -

global economic initiatives spurring a demand for

skill. There's money in the

market. That was true, a

positive day on the market all

around. To the other major

movers on the parked. Toll

Holdings sumped

Holdings sumped 13%, after

being - surged 13% after being

a transport business. David

Jones jumping 11%, Transfield

climbing 4% securing contract

with a Qatar oil company.

For the second time in six months GPT Group has gone cap

in hand to the market. The

property company is looking to

raise 1.7 billion to help pay

down debt. Exit from its joint venture with the venture with the collapsed

Father Arturo Baneulas, GPT is

offering existing investors new

shares, 26% discount to the

last traded price, as we last traded price, as we heard earlier newspapers are earlier newspapers are becoming

a licence to lose money, Rupert

Murdoch revealed his newspaper

suffered huge losses as

advertisers desert print for

the web, he's the latest

prominent newspaper owner to

feel the pain of a rapidly

changing media landscape. ABC's northern American northern American correspondent

Michael Rowland reports. Rupert

Murdoch built his fortune on newspapers, they are now

costing him one, the company's

newspaper earnings nosedived

97% in the first three 97% in the first three months

of the year as advertising

revenue dried up. There's no

doubt the traditional newspaper

doubt the traditional newspaper

model has to change. Revenues

are undoubtedly migrating to

the web, probably not to return. Rupert Murdoch is

looking at other ways of making

money, in particular he wants

to charge people to look at

newspaper websites. Newspapers

are in a dire situation to

figure out how to sustain

themselves economically. It's

been a brutal week for the US

newspaper industry, newspaper industry, the The

Boston Globe, one of the Boston Globe, one of the oldest

titles has been on the brink of

closure, the paper expected to

lose more than $100 million,

journalists who had pay and

conditions cut aren't

optimistic about the paper's future. I'm hopeful future. I'm hopeful for a

breakthrough in the economy or

a new business model allowing

us to continue to do our work

and do it well and be fairly compensated for

compensated for it. The outlook

for newspapers is grim, plunge

ing advertising revenue and

popularity of online news sites

challenge the famous masthead.

The red ink will flow for some

time yet. Billionaire time yet. Billionaire investor

Warren Buffett says newspapers

are facing unending losses, he

wouldn't buy one at any price.

wouldn't buy one at any price.

It caps off a result of a dreadful earning dreadful earning season. New

York Times suffering York Times suffering 27%, The

Washington Post and USA Today

seeing earnings die more than

30%. We have seen happen in the

last year is that the time

frame that the newspaper

industry has to find an

economic model for themselves,

in the online world of

communications has shortened

drastically. Newspaper analysts

say the online world is no

longer the revenue bonanza it

was. You are never going to see

the same amount of revenue come

through online, we are already

beginning to see declining

rates for the price of an ad

page for a display which is

what most news websites

what most news websites use.

That's begun to decline because

there's a glut of ad space on line. Unlike struggling banks

the big newspaper companies

aren't about to be rescued by

the US Government There's

concern and sadness when you

see cities losing their newspapers, regions of the

countries losing their

newspapers. So it's certainly

of concern, I don't know what

in all honesty Government can

do about it. For the man who

built a global newspaper empire, these are difficult

days indeed. The public days indeed. The public release

of the long awaited results of

stress tests on the financial

health of the 19 biggest US

banks is hours away after days of speculation about how many

more billions in new capital

the banks will need. The Obama

Administration says none of the

banks is at risk of

banks is at risk of insolvency,

many are expected to require

tens of billions of capital

with Citigroup and Bank of

America thought to need to

raise the most cash. Golden

Sachs and JP Morgan on the list

that don't need to raise funds,

for his thought we are joined

live from Boston by Professor

minor, senior lecturer minor, senior lecturer at Harvard

Harvard University. Welcome to

the program. Thank you for

having me. Results of the

stress deft test have been

strat eej ekely linked. 10 of

the banks need to raise capital

is that how you see the

outcome I don't know for sure,

we haven't seen the report,

it's a bit of a vague exercise

to know what the stress tests mean, we

mean, we have to make assumptions about how the

economy will perform, we have

to value the assets referred to

as the toxic assets, those are

not widely trades, knowing what

a market price is and what

their value is is tricky, based

on information available it

seems to be about a reasonable

number that half of those bangs

are in good position, something

like half are problematic to varying

varying degrees. It's going to

be arbitrary wherever the level

is set. Overall, what will be

the quantum of money that will

be needed because be needed because originally

there was specku laghts that it

would be extreme, if you - speculation it would be

extreme, if you look at market reaction there are thoughts

it's not as bad as first

thought. The market reaction

may be a couple of things, it

may be relief the stress tests

are obvious or that they are obvious or that they are

accepting Government figures on

what the asset values will look

like. If the economy improves

or stops going down wards

quickly the value of these

assets will stabilise, which is

good for the balance sheets.

But again, it's very hard But again, it's very hard to

know because we haven't seen

what the assumptions are, and

we don't know

we don't know what assumptions they are making

they are making about how to

value Government money or how

much more money will come in

from the Government versus the

operate sector, there'll be a

fair bit of uncertainy fair bit of uncertainy and

caution about what the numbers

peen. It's a risky business, -

mean, it's a risky mean, it's a risky business.

Not just necessarily about what

is behind the stress test in

terms of assumptions, if it's

too tough investors will

too tough investors will be

nervous, you get another leg

down in market, if it's too

easy, there'll be no

credibility at all. It was

difficult. They want to to

accurate and incredible.

There's no completely

straightforward easy way to do

that. The more detail the

that. The more detail the more

in the report about what they

assume or know or think they

know, the more credit will be,

we'll get better information on that seeing the that seeing the report. Given

we are talking tens of

billions, we won't know the

number, the Bank of America

needs up to $34 billion, Ben

Bernanke says he expects the

banks to bolster balance sheets

through private sector funds,

given the banks had billions of taxpayer money and

taxpayer money and Government guarantees, will the private

sector be prepared to put more

in? I am not so convinced about

that. The obvious answer is if

the private sector wanted to

put money into the banks it's

been free to do so, it may have

delayed until seeing the

results of the stress tests.

The private sector would be

hesitant to put money in

depending what the Government

does, if you put money in and

the preferred shares are

converted to common shares your

ownership stake is deluded, you

don't want to do that until you

know what the Government

decides to do. There may be

private sector money coming in,

the uncertainy about how much

the Government is involved may

slow down private sector

participation. When Tim Geithner says none of the 19 banks is at

banks is at risk of insolve

vensy, does that mean the

Government won't let them fail,

again taxpayers will end up

being the lender of last

resort. I think that is what it

means. I don't think he can

know that thon of them is in a

bad position. Whether they are

in a bad position or not

depends on how well you value

what the Government put in so

far and the guarantees the

Government issued through it

Government issued through it

FTIC, a lot of debt held by the

banks, they are saying, "We'll

do what it takes to we don't

put the companies through

receivership", the technical

term for a bankruptcy for a

bank, there's discussion about

whether that's right or wrong,

what they have committed to is

they'll try to do everything

short of having to take over

any of the banks. I know that

in past papers that you have

the wrong approach the written you think they've taken

the wrong approach the whole

way, if it should nef have come

to this, if a bad bank should

be allowed to fail on their

own, what is your best bet of own, what is your best bet

what should happen next. I

think it's hard to know. The

hope is that they will start in

six months, almost a year. When

the economy is recovering to

announce a clear predictable

reducing easy to monitor system of

reducing the guarantees,

letting the guarantees of debt

expire of gradually selling off

the shares we've

acquired. Gradually the acquired. Gradually the banks

returned to being fully private

entities, there's a lot of

political reasons why that

won't happen, that's the

intention of Treasury and the

Fed, they'd love to do that,

I'm nervous they'll do it in an

orderly and quick fashion

going into the decision because of political realities

making. In terms of what we'll

see in the next you will couple

of hours and in the next couple

of days, do you think it will

be enough to in the short term

restore confidence? I suspect

it will, I think we know a fair

bit. We have the big picture

from the various leagues, many

as you suggested earlier in the

peace my have been strategic, I

think they wanted it to happen

so there wasn't a big surprise

come 5pm today, that was time

after the markets closed here.

It does seem as though based It does seem as though based on

the report and that leakage and

lots of other indicators people

feel that things have calmed

down, not that they are necessarily growing, but

somehow the bleeding slowed

down or stopped so we can catch

our breath and start to go

forward in a few more months or

so. Thanks for your insights

Professor minor . Thank you for

having me. -- Professor Jeffrey

Miron, thanks for your

insights. Rio Tinto's head of

strategy launch add an attack

on critics of Chinese

investment in Australia saying

it's perverse to argue China is

a nefarious force, Doug Ritchie

compelling for shareholders says the Chinalco deal is

despite the rally, they face a battle to convince

shareholders, public and

political leaders that there's

nothing to fear from Chinese

investment. As Rio Tinto courts

a $30 billion investment from

Chinalco, it's fighting a

public relations battle on two

fronts, first to convince the

Australian public to accept

more Chinese investment in the resources industry. This

presumption that, as I said

before, that China is some

Monnio life that does things

for nefarious reasons is so

perfecters. Second to convince

its own shareholders the deal

represents good value. Some

argued the recent commodity and

equity market realities make

the bid for Rio less

attractive. That's a question

for shareholders to decide in

two months time says Doug

Ritchie. The market is vol

time, there are views saying

that the equity market has that the equity market has run

ahead of where the economy is.

I would prefer to not comment

on the deal in that sense,

on the deal in that sense, it's

a strong deal, with lots of

attributes, they've been well

explained. Doug Ritchie told a

forum in Melbourne it's a myth

that foreign investment sucks

wealth out of Australia and for

every dollar of income

generated only 5 cent goes

overseas, saying Japan

contributed to the mining

industry in the '70s and '80s

with fears that Japanese investment proved investment proved unfounded.

Chris Richardson argued Chinese

investment is likely to follow

a similar course and shouldn't

be feared. Because we dictate

the use of assets in the country, we have country, we have sovereignty

over the laws, over the

enforcement of those laws, we

owe the police and so on, we

get to tick date the use. The

ownership was not the

issue. The Lowy Institute Mark

Thirlwell supports foreign

investment but shows Chinese ownership of Australian

resources faces political and

public opposition. We ask

should Australian authorities,

officials treat foreign

controlled Government

investment different to that

from private sector. 85% of

those we asked agreed for

strongly agreed. Governments

who are at the end of the who are at the end of the date

responsible to people elected

them have to take those views them have to take those

into account. Dr Paul Monk says

Chinalco is not a commercial enterprise independent from enterprise independent from the

Chinese Government and when the

State buys up foreign assets it

does so for strategic and

geopolitical reasoning. This is

a case of the Chinese State

saying through this arm of

global interest we'll make this acquisition. While Rio Tinto is

looking to Chinalco for

salvation others hose down

market hopes that China can

pull the global resources

industry out of its slump.

Although commodity prices

firmed in recent weeks alumina

limited's John beften told the company's annual general

meeting that demand is likely

to full 7% this calendar

year. The aluminium build up of

stocks everywhere has been an

issue for the globe. I think in

China we are seeing signs of

demand pecking up. Overall we

see that it's getting back to

the levels it was in the middle

of last year. That's a long way

from the boom times of earlier

years. Looking at the business

diary - the rank releases quarterly statements on

monetary policy, Bank of Japan tables minutes from last month's policy meeting,

Before we go at look at

what's making news in the

business sections of the

papers, The Herald Sun leading

on the share market rally,

Australian - Rupert Murdoch's

view examined as to the worse

being over for the media

section. Financial Review -

leaving on the appointment of

Dade Thodey as Telstra's CEO.

The European Central Bank cut

the benchmark interest rate 25

basis point to 1%. The Bank of

England kept its rate

unchanged. It will pump $100

billion into the economy.

Before I leave you the do you

opened up 49 points, half of 1%

and FTSE trading up 110 point

goodnight. or 2.5%. I'm Ali Moore

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