When you finally find the perfect guy you think to yourself, why isn't he taken? Your position:Home->china news-> China get more resources in foreign China Inc.'s appetite for iron ore, coal, copper and such seems insatiable. So far this year, Chinese firms have proposed or completed $9.7 billion of deals in Australian resources companies, Dealogic figures show. That's nearly three times more than in all of 2008. Using Japan's resources deals in the 1970s and 1980s as a benchmark, Citi Investment Research estimated how large China's stake in Australia could grow. Behind China's M&A flurry is an effort to bolster the security of its supply by ensuring its investments match its resources needs. Citi puts the net present value of Japanese stakes in Australian mining assets at $20 billion, while Australia's mining companies sell about $15 billion worth of minerals to Japan each year. With Australian mineral sales to China now around $22 billion a year, to achieve a similar ratio, the Chinese would need to own $30 billion worth of assets -- more than three times the value of their present stakes. That could be a lower limit. Japan's buying spree was stalled by the 1990s downturn there. Japan didn't have ambitious champions like China's Chinalco; most of its deals were done by trading houses. Still, China's stake-buying in Australia could face constraints. China, a late entrant to the global economy, is having to secure resource supplies quickly and aggressively, with much of the world's best mineral assets already held by big players. As long as the credit crunch lasts and companies are starved of funding, China's window of opportunity will remain open. Already, though, the possible renegotiation of the Rio Tinto-Chinalco deal, which points to less favorable terms for the Chinese company, shows how improved markets could make life harder for Chinese acquirers. That's not to mention political concern about Chinese investment. More competition for assets could also come from major resources companies. There's more potential for Chinese resources deals. But the country may have to compromise and cast its net wider. Andrew Peaple 
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