Expanding Commercial Ties with China

Deputy Prime Minister and Minister for Trade Mark Vaile said that the six significant commercial projects signed today between Australia and China is a further sign of the expanding economic relationship between the two countries.

"The commercial projects cover a range of energy and minerals, bauxite, iron ore, natural gas, coal and wind energy, underscoring the breadth of resources cooperation and the longstanding, mutually beneficial trade in resources," Mr Vaile said.

"Australian energy and minerals continue to play a crucial role in China's economic development. The signing of these projects provide a snapshot of Australia's dynamic commercial links with China.

The agreements were signed at the beginning of the first meeting of the new bilateral High-level Economic Cooperation Dialogue at Parliament House. The meeting was chaired by Mr Vaile and the Chairman of China's National Development and Reform Commission, Ma Kai, with Mr Macfarlane in attendance.

"China is investing directly in Australia's manufacturing capacity through ChemChina's completion of its deal to buy the Australian plastics manufacturer, Qenos", Mr Vaile said.

"Chalco's willingness to develop the Aurukun bauxite deposit on Cape York Peninsula is particularly welcome. This project could involve the investment of up to $3 billion, including the construction of a refinery".

"Gindalbie Metals and Anshan Iron and Steel have agreed to conduct an iron ore feasibility study in the Karara area of Western Australia, broadening the base of our iron ore industry'.

"Australia is also helping to address China's environmental needs by providing cleaner energy and reducing greenhouse gas emissions".

"I'm encouraged that BHP Billiton, Kerr McGee and CNOOC International Ltd are joining forces to undertake gas exploration in the Browse Basin. The Australian LNG industry is on the cusp of a new era, with two projects now in production and LNG shipments to Guangdong starting in May.

"Australia's HRL and China's Harbin Power Engineering are proposing to build a 400MW power plant in Victoria's Latrobe Valley. This is the first clean coal and low emissions project between Australia and China. It will use HRL's clean coal technology, the Integrated Drying and Gasification Combined Cycle, developed after more than 10 years of research and the investment of $140 million.

"Renewable energy is another emerging new frontier in the economic relationship', said Mr Vaile.

"Roaring 40s Renewable Energy - a joint venture between Hydro Tasmania and China Ligh Power Asia - and Guohua Energy Investment Corporation are working together on wind farms in China, one in Shandong Province and one in Inner Mongolia".

Mr Vaile said investment was expanding in other areas as well, indicating that economic links were broadening and diversifying.

"Several large Australian companies are on the verge of completing major investments in the Chinese financial services sector."

IAG is negotiating to purchase nearly 25 per cent of Shanghai-based China Pacific Property Insurance, China's second largest general insurer with a market share of approximately 12 per cent.

ANZ Bank is awaiting final regulatory approval to acquire 19.9 per cent of China's fourth largest city commercial bank, Tianjin City Commercial Bank. It is also cooperating closely with the Shanghai Rural Commercial Bank, with a view to making a similar investment at an appropriate time.

Contact: Mr Vaile's Office 02 6277 7420, Departmental 02 6261 1555