China arrest, Rio Tinto sales team

[jagman]

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6664810.ece

Seemingly in a dispute over iron ore prices, four of Rio Tinto's sales team in Shanghai have been arrested
I know there are several Arresers with a good insight into Chinese doings and was wondering what their take is on this?
China has huge demand for imported raw materials, is arresting suppliers for refusing to drop prices far enough really going to help China at all?
More to the point, will this see an increase in companies being reluctant to trade with China?

 

[Kitmarlowe]

I'm not sure what China is up to but Rio Tinto binned a a near $20 Billion deal with Chinalco in exchange for a deal with BHP Billiton

China is also trying to screw down the cost of Iron ore, but isn't having a lot of success.

I think that China may have overplayed it's cards a bit here.

It's interesting to note that the Sales Team arrested has been disccussing it's plans outside of China, citing beliefs that the Chinese were bugging them.

 

[jagman]

Yeh, I am wondering if China has misjudged the balance between how badly it needs suppliers and how badly those suppliers need to sell to China.

 

[Kitmarlowe]

Yeh, I am wondering if China has misjudged the balance between how badly it needs suppliers and how badly those suppliers need to sell to China.

It's not as if Iron Ore can go off.....and I'm sure HM Government would be chuffed to F**k if Steel prices dip

 

[smartascarrots]

My first impression was it was retaliation for RT screwing the Chinalco deal. I've gained the impression from dealings that their philosophy of dealings is that as long as the money keeps flowing, businesses in the west won't worry about anything else. There's a lot of truth behind it but I do wonder how far they're going to push things without realising that some firms can sell their raw materials elsewhere and still make a profit.

 

[armchair_jihad]

My first impression was it was retaliation for RT screwing the Chinalco deal.

Thats how I see it, its not the actual people involved in the deal its the various 'princelings' in Beijing who were due for various cuts backstage, as it were. They, like the petulent free loaders they are, are showing how upset they are at missing a free lunch, not caring how damaging it it to China's image (they really will care will once their Dads get carpeted for this utter bullsh1t and the Chinese middle classes cotton on).

Its really not how things are done in Shanghai or most of the east coast, I can well imagine that there are some very serious shouting matches going on right now between the Beijing and every other major City / Province with International exposure.

They will be released without charge with fulsome apologies and credit lines soon enough.

If not then I won't be the only one who starts to move stuff offshore.

edited to add for those who don't know 'princeling' is a negative Chinese term for the son or daughter of a very high official almost always in Beijing who use Dad's position to make collosal amounts of money. They are woven into the very fabric of political and business life here and are almost always w*nkers of the highest order. Two of the more noted ones alledgedly control the illegal arms trade of Chinese made but Russian / Ukrainian stamped weapons that end up all over the place.

They are despised but rightly feared until as often happens they go too far and Dad chooses to get demoted rather than junior getting banged up.

Its a right happy ship Beijing power politics

 

[Kitmarlowe]

Interesting chunk in the India Times

http://timesofindia.indiatimes.com/...o-arrested-for-spying/articleshow/4759265.cms

It seems the Chinks are claiming that the Aussie was being a bit James Bond

 

[jagman]

Mmmh so the demand for a 40% discount has nothing at all to do with it then?
China don't seem to be doing themselves any favours here

 

[Kitmarlowe]

I must admit the Chinese have got no one but themselves to blame if they thought they could get a 40% discount. But it doesn't appear to be that simple.....http://www.ft.com/cms/s/0/badb9178-4620-11de-803f-00144feabdc0.html

 

[smartascarrots]

Apologies for a bit of gravedigging, but this caught my eye. LINK.

The dragon has woken and learnt it needs to be brutal – Chinalco’s failure to press home its advantage is unlikely to be repeated.

Nottingham's CPI is the premier China analysis centre in the UK and the author's shown in the past an uncanny ability to think his way into the shoes of people making state policy in the PRC.