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Chinese Economic StatecraftCommercial Actors, Grand Strategy, and State Control$
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William J. Norris

Print publication date: 2016

Print ISBN-13: 9780801454493

Published to Cornell Scholarship Online: August 2016

DOI: 10.7591/cornell/9780801454493.001.0001

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Rio Tinto and the (In)Visible Hand of the State

Rio Tinto and the (In)Visible Hand of the State

Chapter:
(p.90) 5 Rio Tinto and the (In)Visible Hand of the State
Source:
Chinese Economic Statecraft
Author(s):

William J. Norris

Publisher:
Cornell University Press
DOI:10.7591/cornell/9780801454493.003.0006

This chapter examines a case in which the state played an important role in controlling and directing the behavior of its commercial actors to achieve a national strategic objective in the context of iron: the proposed merger between Chinalco and Rio Tinto. It begins by providing the context that originally put Rio Tinto in play before discussing the origins and mandate of the China Development Bank (CDB), Chinalco's financial backer in its bid to acquire a large stake in Rio Tinto in 2007/2008. It then considers the CDB's financing activities and goes on to explain how the provision of state capital to state-owned enterprises (SOEs) can serve an important enabling and coordinating function for Chinese state control. The chapter also shows that the CDB was being directed by the State Council to underwrite a commercial acquisition that served China's national interests, even if these activities ran counter to the economic actors' own commercial motivations.

Keywords:   commercial actors, iron, Chinalco, Rio Tinto, China Development Bank, China, financing, state-owned enterprises, state control, State Council

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