Development Bank has taken a stake in Rio Tino, an Aluminium miner

November 11, 2007 at 1:43 am | Posted in china, economy | Leave a comment

Our news today that the China State Development Bank has taken a stake in Rio is the clearest sign yet that China is not going to sit on the sidelines of what promises to be a battle royal for control over some of the most lucrative assets the world holds. The stake may be small and right now no one – perhaps not even the Chinese – knows what the endgame will be. Whatever it is, China has put a marker down.

It should be no surprise. Steel is a cornerstone of the Chinese economy and has an iconic status in the country that goes far beyond its role in the industrialisation of the country. It already buys 20 per cent of BHP’s output and in iron ore, the main feedstock for steel, the country is close to consuming 50 per cent of the world’s production. No wonder its appetite for resources – in Africa, Latin America and other parts of Asia – is huge.

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