Forbidden City

Iron and awe

  • Published 20 Aug 2009

One minute Beijing warns of commercial espionage by Australia's Rio Tinto, the next it signs the biggest trade deal to date with the country. Where do China's true sympathies lie?

Observers of China's commercial policy could be forgiven for feeling confused. One day, the official Xinhua news agency was suggesting that contacts between Chinese officials, experts, managers and foreign businesses should be more strictly controlled in the aftermath of Beijing's spying accusations against Australian minerals giant Rio Tinto. A few days later, Chinese companies were signing two whopping deals to obtain Australian resources – a $41bn (Rmb 280bn, €29bn, £25bn) gas supply contract and a deal to buy discounted iron ore from Fortescue Metals in return for $6bn in concessionary financing from Chinese banks.

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