Highlights from the last week of China business news.
Taiwan elected economic pragmatist Ma Ying-jeou as its President in a landslide that saw Ma win over 58% of the vote. Ma, who favors bolstering economic ties with China, was widely seen as Beijing’s preferred candidate. He got right to the hard work of talking about mending fences with the mainland by hinting at a resumption of economic dialog, particularly in the areas of direct flights across the Straits, mainland access for Taiwanese banks, and tripling the number of Chinese tourists allowed to visit the island. The market responded with good cheer to the potential warming of relations, with tourism firms among the big gainers. But the US crashed the party by admitting it had accidentally delivered intercontinental ballistic missile fuses to Taiwan in 2006 in place of helicopter batteries (a simple enough mistake, really). China’s foreign ministry was not amused.
Movers, shakers, steelmakers
The metal industry was bubbling over with news this week. Rio Tinto’s CEO Tom Albanese said in Beijing that he wanted to work with Chinese firms to develop mining projects across the globe, in part to ease tensions over iron ore contracts with Chinese steelmakers. Albanese, however, had no plans to meet with any Chinese companies during his visit, notably Chinalco or Baosteel. Speaking of Baosteel, the leading steel-maker may face new competition from a merger by Laiwu Iron & Steel Group and Jinan Iron & Steel Group. The new company, Shandong Iron & Steel Group, will be the world’s seventh-largest steel producer. Meanwhile, Chinalco, which recently bought a share in Rio, announced it planned to spend between US$2.8 and 4.2 billion on acquisitions this year, with non-ferrous metals as a major focus. Xinjiang Non-Ferrous Metal Industry is also in talks to bring in state-owned firms as strategic investors and expand its rare metals unit.
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