Australia has warned Beijing not to interfere in difficult commercial iron ore price negotiations and urged China to act as a market economy.
“We’ve been consistent in this regard. Negotiations are for the market. We will not interfere in the market,” Trade Minister Simon Crean said in an interview late on Friday.
“We’ve made the point to China: ‘We have recognized you as a market economy, act as one, don’t seek intervention from the government when it comes to market exchanges,’” he said according to the transcript issued by his office.
Crean was responding to local media reports that a senior official from China’s industry ministry had met with an Australian embassy official to press the point that China paid the highest prices for iron ore, despite being the world’s largest customer.
The trade minister said “all sorts of conversations take place” on a government-to-government level, but iron ore pricing was not one that was regularly discussed.
“We are reminded of the size of their market but that’s an important dimension of our trade relationship anyway,” Crean said.
China’s Iron and Steel Association in December said it would seek to streamline the number of importers and their prices in a bid to boost China’s leverage as global miners sought a 20 percent to 30 percent price hike in what were proving “quite difficult” benchmark talks for this year.
The talks between mills and suppliers, including BHP Billiton Ltd and Rio Tinto Group, are underway, the association said last week.
BHP and some steelmakers had agreed to a provisional 40 percent increase in contract prices, UC361.com analyst Hu Kai said, citing the mills.
China’s relations with the world’s biggest miners — Anglo-Australian companies BHP and Rio Tinto and Brazil’s Vale — remain tainted by the July arrest of Rio executive Stern Hu (胡士泰) and three Chinese colleagues in Shanghai.
Their detention came during fractious iron ore contract talks which later lapsed and just weeks after Rio Tinto snubbed a near US$20 billion cash injection from a state-run Chinese company.
Crean emphasised that Canberra had not sought to have the case dropped against Hu, an Australian passport-holder, and would not investigate Rio as a result of his formal indictment on Thursday on charges of bribery and illegally obtaining trade secrets.
“We recognize the Chinese legal system has to run its course, it’s a different legal system to ours,” Crean said.
“That’s the circumstances in which people go in there to do business or travel in there,” he said.
“We’ve treated it as a consular case, not seeking to interfere with the course of justice, only to bring it to a conclusion expeditiously and transparently,” he said.
There were “no allegations” against Rio, he said, and therefore “no justification or reason on the evidence before us” to warrant an Australian government probe of the miner’s practices in China.
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