Chinalco – Rio Tinto Deal: A Case Study of Foreign Direct Investment from China to Australia

11 Pages Posted: 14 Oct 2009

See all articles by Stanislav Bucifal

Stanislav Bucifal

Australian National University (ANU) - Crawford School of Public Policy

Vileth Kinnayong

affiliation not provided to SSRN

Katherine Healy

affiliation not provided to SSRN

Xiuyu Han

affiliation not provided to SSRN

Xiaoxuan Goa

affiliation not provided to SSRN

Kun Zhao

Government of the Republic of China, Taiwan - State Information Center, State Council of PRC

Ning Mu

affiliation not provided to SSRN

Date Written: September 30, 2008

Abstract

This essay aims to examine the flow of foreign direct investment (FDI) from China to Australia by analysing the proposed acquisition of Australian-based mining company Rio Tinto by the Chinese state-owned aluminium producer Chinalco. The proposed deal is illustrative of China’s interest in engaging in outward FDI, as well as the benefit to Australia in welcoming inward FDI, and highlights key features of Chinese and Australian FDI policies. The paper is organised in four sections. The first section outlines the key features of Chinalco’s proposed acquisition of Rio Tinto. The second section examines FDI flow from China to Australia, looking particularly at the FDI policies of the two countries in the context of the Chinalco – Rio Tinto deal. The third section applies the theoretical policy approaches to the facts of the Chinalco – Rio Tinto deal, discussing the potential benefits and risks of the proposal. The fourth and final section provides a summary and discussion.

Keywords: Chinalco, Rio Tinto, Foreign Investment Review Board, FIRB, Foreign Direct Investment, Australian FDI, Mergers and Acquisitions, M&A

JEL Classification: F21, G34, O16, E62

Suggested Citation

Bucifal, Stanislav and Kinnayong, Vileth and Healy, Katherine and Han, Xiuyu and Goa, Xiaoxuan and Zhao, Kun and Mu, Ning, Chinalco – Rio Tinto Deal: A Case Study of Foreign Direct Investment from China to Australia (September 30, 2008). Available at SSRN: https://ssrn.com/abstract=1487362 or http://dx.doi.org/10.2139/ssrn.1487362

Stanislav Bucifal (Contact Author)

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Vileth Kinnayong

affiliation not provided to SSRN

Katherine Healy

affiliation not provided to SSRN

Xiuyu Han

affiliation not provided to SSRN

Xiaoxuan Goa

affiliation not provided to SSRN

Kun Zhao

Government of the Republic of China, Taiwan - State Information Center, State Council of PRC ( email )

China

Ning Mu

affiliation not provided to SSRN

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