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We've still got it made in China: Ambassador -

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We've still got it made in China: Ambassador

Sue Lannin reported this story on Thursday, September 24, 2009 12:34:00

ASHLEY HALL: The Chinese ambassador to Australia says the arrest of the Rio Tinto executive Stern
Hu won't cause long-term damage to the ties between the two countries.

Zhang Junsai says the case is an isolated incident and the bilateral relationship is alive and
well.

Mr Hu and three other Rio Tinto employees were detained in Shanghai in July and later charged with
stealing commercial secrets.

The Chinese ambassador made the comments at a conference on Chinese investment in Australia.

Our finance reporter Sue Lannin was there and joins me now.

Sue, how has the Stern Hu affected China's appetite for Australia's resources?

SUE LANNIN: Well Ashley in practical terms it's had hardly any effect. We've seen the Gorgon gas
project go through worth $50 billion. There's still lots of other projects. So the relationship is
still very good.

There has been of course a couple of high profile investment proposals that have been changed or
rejected.

Now Rio Tinto did abandon its plan for the Chinese state-owned firm Chinalco to double its stake in
Rio. They decided in favour of an iron ore tie up with rival BHP Billiton in the Pilbara. Now that
made China very, very angry but it seems like that hurdle has been jumped now.

and in fact Australia is, China is Australia's second biggest trading partner. Two way trade in
2008 was worth $74 billion. And in fact the Chinese ambassador says he has never before has he seen
such strong relations between China and Australia.

Here is Zhang Junsai:

ZHANG JUNSAI: Chinese investments in Australia extending from energy and resources to new areas
like automobiles, telecommunications, internet and technical industries. So cooperation has brought
real benefit to our people and integration of interests between us.

So I can say that the strong complementarity makes us natural partners in this world.

ASHLEY HALL: The Chinese ambassador to Australia, Zhang Junsai.

And Sue, you also heard at this conference from the head of the Foreign Investment Review Board?

SUE LANNIN: Yes Patrick Colmer is the man responsible for deciding whether foreign investment goes
ahead or not. Interestingly he was introduced to the audience and there were many Chinese business
people there as giving a speech on how to invest in Australia.

Now he said foreign investment was crucial to the Australian economy and the fact that it had
generated some controversy was not unusual. We'd had waves of foreign investment in the past and
there was controversy there too.

He now, Patrick Colmer says in fact that China is now the third largest investor in Australia
behind the US and the UK. He expects that to increase in the future.

PATRICK COLMER: In the last 18 months though we have processed around 90 separate Chinese
investment proposals for a total of some $34 billion. I think the important thing about that figure
is that most of those projects have not generated any press interest at all. Most of them have gone
through without any problems, without any concerns.

ASHLEY HALL: The director of the Foreign Investment Review Board Patrick Colmer.

Sue Lannin, the big story of today is the rejection of the planned Chinese investment in that iron
ore project in the Woomera weapons testing area of South Australia. Any reaction to that?

SUE LANNIN: Yes. People at the conference were surprised and disappointed. Company executives had
been in talks with the Foreign Investment Review Board but it has been rejected on national
security grounds. And the company Western Plains Resources has slammed the decision as a gross
overreaction.

ASHLEY HALL: Sue Lannin, our finance reporter, thank you.