UPDATE:CHINA CONGRESS: CDB:Chinalco Deal Not Ordered By Government
March 06 2009 - 4:16AM
Dow Jones News
State-owned China Development Bank Corp., which is likely to be
a leading financer of Aluminum Corp. of China's $19.5 billion
investment in Anglo-Australian miner Rio Tinto PLC (RTP), said
Friday that any funding deal with Chinalco is "based purely on
commercial interests" and isn't directed by the government.
The expected role by CDB - which is owned by China's Ministry of
Finance and the sovereign wealth fund China Investment Corp. - in
the financing of Chinalco's deal has complicated the review of the
deal by the Australian government and raised concerns Chinese
government interests are behind it.
Australian Prime Minister Treasurer Wayne Swan told CIC Chairman
Lou Jiwei last month that Australia is open to foreign investment
so long as the investment is in the national interest.
CDB President Jiang Chaoliang, who was speaking with a select
group of reporters in a rare interview during the National People's
Congress, China's annual legislative session, said any
national-interest concerns due to CDB's government background are
unwarranted.
"The business relation between CDB and Chinalco is purely based
on commercial interest, Jiang said.
He said CDB is just one of China's state banks that are
interested in cooperating with Chinalco.
"Any bank in China would love to do business with a good client
like Chinalco...CDB isn't an exception," he said.
CDB and Chinalco haven't yet signed a final agreement about
funding, Jiang said.
But even if a financing deal is struck, CDB "wouldn't have any
power to intervene in how Chinalco would use the money, as long as
it is used safely. It will be totally up to Chinalco's management
to decide," said Jiang, the former chairman of state-run Bank of
Communications Co.
Jiang was named to his current position in September as part of
the policy bank's transformation into a stockholding commercial
lender, after an investment vehicle under China's sovereign wealth
fund injected $20 billion into CDB at the end of 2007 to take a
nearly 50% stake from the Ministry of Finance.
CDB was founded in 1994 under the direct supervision of the
State Council and is the country's biggest issuer of bonds behind
the Finance Ministry. It has been primarily tasked with supporting
China's infrastructure construction and development of backbone
industries.
Jiang said CDB's role as a major state bank that serves the
country's medium to long-term economic development remains
unchanged after the overhaul.
"In the foreseeable future CDB will absolutely remain controlled
by the government", he said.
CDB has no plans to introduce any foreign strategic investors
for now, Jiang said.
Instead, he said CDB will choose a right time to introduce as a
strategic investor the National Council for Social Security Fund,
China's pension fund that sits on roughly US$80 billion worth of
assets.
-Victoria Ruan contributed to this story, Dow Jones Newswires;
8610 6588-5848; victoria.ruan@dowjones.com