Highlights from the last week of China business news.

Hobnobbing in Bali and Beijing
Lots of high-powered meetings recently, with the attendant speculation about their outcomes. Probably the most enjoyable one to be at is in Bali, where 190 countries have sent delegates to hash out a plan - for two weeks - to replace the Kyoto Protocol, which expires in 2012. That meet started Monday, and, although details are still surprisingly thin on the ground, it appears that China will continue to reject imposed emissions targets. It will propose the creation of an international technology transfer fund - paid for by developed countries - that will help developing nations research and create their own clean technology. This works out very well for China, clearly. In the less salubrious environs of Beijing, another meeting of consequence ended this week, confirming the rumors that the top national leadership has decided to step up monetary tightening measures next year. The seasoned decoders of bureaucrat-speak at the Journal say officials now speak of a “tight” monetary policy for next year, instead of the “stable-to-tight” regime now in place. Next week, the US-China Strategic Economic Dialog happens for the last time this year. Hank Paulson flies in with Susan Schwab, product safety chief Mike Leavitt and others to talk about product safety and - surprise! - letting the yuan appreciate more quickly. Vice Premier Wu Yi must be glad she’s retiring in March.

Rio Tinto mines a rich vein of rumors
Will they or won’t they, steel executives wondered this week about a Chinese counter-bid for Rio Tinto. Last week, we wrote that China Investment Corp was rumored to be putting together a deal to buy into Rio, but that was quickly squashed by CIC and Rio executives. The sovereign wealth fund did say, after all, that it’s not confident enough to go raiding abroad yet, and that it would steer clear of sensitive industries. So the rumor mill promptly put new hearsay into circulation. For awhile, it seemed that Baosteel would spearhead a consortium of Chinese firms to snatch up Rio Tinto. A Baosteel executive told Economic Observer last week that his firm would only join a bid if the Chinese government wanted it to - hinting that a bid was possible, though not confirmed. Then the 21st Century Business Herald said Baosteel chairman Xu Lejiang confirmed that a bid was in the works. Shares of Rio Tinto jumped. Today, the official Shanghai Securities News quoted Xu denying the quote. “I did not say this. It is a fabrication of the media,” he said. Even with that seemingly definitive response to the matter, our guess is the rumor mill still has plenty of grist to keep it churning.

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Highlights from the last week of China business news.

Minesweepers
The world has three big mining companies, so when one of them tries to buy out another, serious consequences abound. Australia’s BHP Billiton has been trying to buy rival Rio Tinto, which caused alarm in China, because that would mean two companies (BHP and Companhia Vale do Rio Doce) controlling the supply of iron ore - not a situation a large iron ore buyer like China likes to find itself in. China Investment Corp, China’s new sovereign investment fund was rumored to be ready to swoop in with a counter-bid for Rio Tinto, reportedly rallying local steelmakers like Baosteel to put up a US$200 billion offer. The bid was quickly denied by both CIC and Rio Tinto on November 27. Nevertheless, a top Baosteel officer remarked to the Economic Observer after CIC’s denial that Baosteel would only join a Rio Tinto bid at the behest of the central government.

New ways to curb carbon?
Amid the chorus of calls for a stronger yuan this week from EU officials visiting Beijing, French President Nicolas Sarkozy added a threat about possible carbon tariffs for Chinese imports. He said he would defend the idea of a carbon compensation mechanism for imports to EU countries, before an important international meeting in Bali next week that will help decide a successor to the Kyoto Protocol. Earlier, the United Nations Development Program released a report that will set the agenda at the Bali summit that recommended cutting China and India some slack when it came to emissions limits. The report says that rich industrialized nations must bear the brunt of emissions caps. It also hinted that the cap-and-trade system implemented by the Kyoto Protocol may be outmoded and that a Sarkozy-style carbon tax may be a better option. China and the UK also announced this week a new clean-energy project that will work on carbon sequestration technology to create so-called clean coal.

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Highlights from the last week of China business news: China comes off smelling like roses at the APEC summit in Sydney, much to Bush’s chagrin; the latest macro numbers are out, and inflation isn’t getting any lower. (more…)

Just attended a press briefing by CB Richard Ellis in Shanghai on cross-border transactions in various property markets.

One interesting nugget came during a presentation by CBRE’s regional director of research for the ‘Pacific’ (that is, Australia, New Zealand and the Pacific Islands) region, Kevin Stanley.

He produced some figures that showed office property growth rates in Western Australia cities like Perth and Brisbane going off the charts. Brisbane grew 27% while Perth went up 20% (Sorry, I think it was year-on-year but I could be wrong).

Growth rates will continue to be high if things go as expected; Stanley put projected growth rates at 30%. According to him, the market is still in the accelerating growth phase, but the next four months should see a slight slowdown.

China, of course, is behind this monstrous growth.

“China has had a massive impact on the growth situation. The commodities sector is at a record high level both in terms of prices and volume,” Stanley told me after the presentation. “Two and a half years ago, vacancy rates were 13% — now they are at 2%.”

He said that Australian companies were taking up a lot of the space, while global firms were also significant factors, because of the globalization of the commodities supply chain. He placed the beginning of the growth trend at 2002.

See also: Chalco’s recent deals to develop a bauxite mining site in Queensland, Australia-China trade levels, The Daily Reckoning Australia’s analysis of China’s commodity demand — its ‘new Silk Road’