Is China Panicking over Ore Prices?

I am very aware of how news can be unreliable in the middle of a merger deal, as stakeholders often attempt to flood the media with stories that are favourable to their ends of the bargain.  That is why I have been putting off writing about China’s interest in BHP Billiton’s takeover bid for Rio Tinto, let alone predicting whether Chinese companies will put in a counter bid.  The deal is still far from conclusive, even though market observers are generally dismissing the possibility that Chinese companies will play a significant role in the merger.  This does not mean, however, that China is not aware of the implication of the merger or not concerned about how this is going to limit its access to affordable iron ore.  China’s anxiety over the outcome of the takeover is reflected in an interview that a Chinese Foreign Ministry spokesman Qin Gang had with Stephen McDonell, Australia Broadcasting Corporation (ABC)’s China correspondent.  This interview was broadcast during ABC’s AM radio program on Wednesday, 28 November 2007.  The following is a transcript of Stephen McDonell’s report.