This is an article, Chinese query Rio's 'honour' from Age. I'm shocked!
XINHUA, China's official news agency, says Rio Tinto behaved like "a dishonourable woman" in spurning China's white knight, Chinalco.
Most Chinese commentators appear to have concluded that Rio's decision to dump Chinalco for BHP Billiton was all about Australia's anti-China politics.
But a Xinhua commentary, in contrast, said Chinalco was like a jilted corporate lover, who failed to comprehend the inherently devious and meretricious nature of international corporations.
"Of course, first of all, the break-up is Rio Tinto's fault," said the Xinhua commentary, picked up by hundreds of Chinese websites yesterday.
"Rio Tinto is like a dishonourable woman: once she loved the money in Chinalco's pocket but she actually did not love the man himself. Now she is breaking faith and kicking down the ladder."
The Xinhua commentary said Chinese companies needed to be less romantic and more hard-headed.
"Chinese enterprises should learn a lesson from this: those who love money are not reliable," it said. "So we should have more precautions, not just including a 1 per cent break fee in the contract.
"Never trust anyone too easily. There is only one rule in the international dealings: that is, there is no eternal friendship, only eternal profit."
He Liangliang, a commentator with Hong Kong's Phoenix TV who is popular in China, blamed Canberra for orchestrating the collapse of the deal.
"In fact, I believe in the end, the Australian Government played a key role, though it will never admit that this is a political decision," he said. "If it did say so it would cause a greater storm, so it will only say this is a commercial decision."
Ye Tan, a leading business commentator and critic, wrote on her blog that Chinese companies faced all kinds of discrimination overseas.
"Chinese state-owned enterprises have to give up rights they are supposed to have such as becoming the main shareholder, or chairman of the board of directors, and having to step back to being a purely financial investor," said Ms Ye. "And still they are not able to win the understanding of their opponents."
Ms Ye noted the irony that Chinese companies had pushed the Rio stock price out of Chinalco's reach by hoarding stockpiles of commodities and artificially inflating global demand.
Shan Shanghua, head of the China Iron & Steel Association, told Caijing magazine over the weekend that the BHP-Rio tie-up "will lead to a monopoly operation". He adamantly denied reports in Steel Business Briefing on Friday that his steel association might reverse its decision to reject the 33 per cent price cut for iron ore fines agreed between Rio Tinto and Nippon Steel. "We absolutely will not accept a 33 per cent price cut," he said.
Mr Shan added that Chinese steel makers in CISA had no right to negotiate iron ore prices individually with overseas miners and that any separate agreements reached with miners would be invalid.
Tuesday, June 9, 2009
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