Australian authorities approved $438 million Chinese investment in Fortescue Metals Group, Australia’s third-largest iron ore miner. China’s state-owned Hunan Valin Iron and Steel Group received approval to take up to 17.55 percent of Fortescue. The Australian decision was relatively unexpected as a similar Chinese mining investment bid was blocked on Friday and yet another Chinese-Australian investment deal is still waiting for official approval.
Argentina and China signed a currency swap that will allow China to receive renminbi instead of dollars for its exports. Argentina, which mostly imports industrial components and electrical goods from China, supports Beijing’s call for a new global currency reserve regime. China has recently suggested replacing the dollar as global currency and actively promotes wider international use of its own currency.
The Asian Development Bank cut its forecast for economic growth in China to 7 percent from 9.5 percent. Although the Chinese economy is reacting positively to the $585 billion stimulus package and leading indicators are pointing to an economic recovery, the ADB doubts that the stimulus measures are sufficient to create enough jobs. The ADB report concludes that unemployment will be China’s “most pressing issue” as infrastructure projects and other stimulus measures will fail to create enough employment for the country’s growing labor surplus.
