The China Daily of 18 December 09 reports about concerns that a Big Australian is too big! In its magazine China Metallurgical News, the China Iron and Steel Association (CISA) expressed concerns about the "monopolistic" JV between BHP Billiton and Rio Tinto. CISA views the JV as detrimental to China's economic interests. Although the Australian miners stated that the JV would cover only the cost and not the sales side, CIAS remains unconvinced by the assurances offered, suggesting the relationship would reduce competition and increase the price of iron ore globally. In fact, CISA felt that "customers across the whole world should oppose it as one". The underlying concern, however, remains one of self-interest - to ensure China gets an equitable result when it negotiates its price. While China is the biggest market for each of the JV partners, the China Daily also reports that Beijing faces an up hill battle to ''gain any price concessions from Rio Tinto, BHP Billiton or Brazil's Vale''. In fact, CISA wants that the Chinese government to use its anti-monopoly legislation to kill the deal. The Chinese Daily, however, reports this strategy would be difficult because of China's untested laws in the area.
No comments:
Post a Comment