Money talks in China deal

Another reason why as long as China grows, Australia grows, and how it may not even be much of a help though they've got a Prime Minister who speaks and understands the Chinese; well. these economics of international relations... economically synergistic but with madly plastic faces blinded by the dollar bills, and bragging rights.

---

Money talks in China deal
Mathew Murphy and Michelle Grattan
August 19, 2009
Source - The Age

AUSTRALIA will supply $50 billion worth of liquefied natural gas to China over the next 20 years in the nation's biggest ever trade deal.

In a clear sign that diplomatic tensions have not undermined economic dealings between the nations, state-owned PetroChina has agreed to buy 2.25 million tonnes of LNG a year from the huge Gorgon project off the West Australian coast.

The deal came as Foreign Minister Stephen Smith yesterday confirmed that China had cancelled a vist from a senior official in retaliation for Australia granting a visa to exiled Uighur leader Rebiya Kadeer.

The two countries have also been in dispute over iron ore prices and the detention of Australian Rio Tinto executive Stern Hu over bribery allegations.

But Resources Minister Martin Ferguson, who attended the signing of the LNG deal in Beijing, spoke glowingly of the bilateral economic relationship.

''This agreement is testimony to the strength of Australia's continuing trade and investment relationship with China,'' he said. ''As China continues to develop as a modern global industrial and commercial powerhouse, Australia is committed to walking with it on its remarkable journey.''

He said the deal would provide a significant boost to Australia's gross domestic product.

Under the deal, ExxonMobil will supply China with 2.25 million tonnes of LNG a year from Gorgon, Australia's biggest natural resources venture.

It comes on top of a deal struck by Shell - a partner in the Gorgon joint venture, along with Chevron - to sell 2 million tonnes of LNG a year to China.

And in a sign of China's insatiable demand for LNG, PetroChina is in talks with Woodside to receive up to 3 million tonnes a year over 20 years from its proposed project in the Browse Basin off the north-west coast of Australia.

Mr Ferguson's presence at the signing gives the clearest indication yet that the Federal Government will give final environmental approval for the project. Environment Minister Peter Garrett is expected to sign off on it next month.

In Parliament, Mr Smith acknowledged that his decision to grant Rebiya Kadeer a visa led to China cancelling a visit to the Pacific Islands Forum by Vice-President for Foreign Affairs, He Yafei. He was replaced by a lesser official.

Chinese authorities had made it ''very clear to Australian officials that they were most unhappy with her visit,'' he said.

The Chinese describe Ms Kadeer as a terrorist, but Mr Smith said he had concluded there was no basis for denying her entry and that she had visited in a private capacity.

China was furious that a film about Ms Kadeer was screened at the Melbourne International Film Festival, despite its intense lobbying to have it pulled and the festival boycotted by other Chinese films.

Mr Smith said Australia regretted China's response but could not rule out further action.

''These difficulties need to be managed carefully,'' he said, referring to the cases of Ms Kadeer and the detained Mr Hu. ''If, of course, China takes any further action in response to our decision, that will be for us a matter of regret but we will deal with that sensibly.'' Recalling that Opposition Leader Malcolm Turnbull had said previously that the Government should stand up to China, Mr Smith said: ''We did on the Rebiya Kadeer issue.''

Shadow foreign minister Julie Bishop said it was ''abundantly clear the Government has hopelessly mismanaged the relationship with China''.

Defence analyst Hugh White said: ''Clearly the Chinese are disappointed in Kevin Rudd and irritated over the Government's handling of a range of issues. But this doesn't threaten the fundamental dynamics of the relationship. There is too much at stake for both sides.''