Although Chinalco’s minority investment in Rio does not trigger an Australian government’s political review, the Chinese company has made a voluntary submission to the Australian Foreign Investment Review Board. The Chinese foreign minister, Yang Jiechi has landed in Canberra this week to lobby the Australian PM Kevin Rudd and the Foreign Minister Stephen Smith.

Buying banks

China’s ‘Go-out’ policy is looking beyond energy and mineral resources to barge into the exalted world of finance capital. Foreign financial firms have now become an important focus for China’s outbound investments.

The latest move is the purchase of a 20 per cent stake for US$ 5.5 billion in South Africa’s Standard Bank by China’s biggest bank, Industrial and Commercial Bank of China.

China’s US$ 200 billion sovereign wealth fund, China Investment Corporation paid US$ 3 billion last year for a stake in the American Blackstone Group that specialises in corporate acquisitions. China’s Ping An Insurance, reports say, is looking for a major European insurance company like the Prudential.

Party poopers

As the scale and scope of China’s financial operations become expansive, the Chinese Communist Party is getting goose pimples. A rare commentary this week in the CCP’s mouthpiece, People’s Daily slammed Ping An’s plans to raise more capital from the stock market. The stock sale is expected to net US$ 22 billion.

Ping An’s decision led to a steep fall of the stock market as investors were apprehensive that the market may not be able to absorb the massive amount of new shares. “Ping An’s announcement did not clearly state the purpose of the fund-raising,” the commentary said. It also called for greater governmental regulation to prevent volatility in the financial markets.

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