Doing Business in China

Australia and China business is in hard time now.The relationship between Australia and China  remains mired, for now, in rancour; the incarceration of Rio Tinto executive Stern Hu and three Chinese colleagues, the visit to Australia of Uighur leader Rebiya Kadeer, who has become for Beijing public enemy No.1, the collapse earlier of the highly anticipated $30bn deal in which Chinalco was to become the dominant owner of Rio, all followed by the pointed downgrading of a planned visit to Australia by a Foreign Ministry vice-minister.

Alistair Nicholas, who comes from Sydney but lives in Beijing, where he is principal of consulting firm AC Capital, says: "Most Chinese, and probably the government too, have for a time seen Australia as somewhere good to study and to holiday, as well as a quarry and a farm. Maybe also something of an honest broker, somewhere China can deal with and learn to understand the West, if not to mediate with the West too, with its Prime Minister who speaks Chinese. Now people are saying they are surprised that Kevin Rudd doesn't really understand China."

It has not occurred to such critics that he may know China too well for their comfort.

"But there is a real inability in China to understand concepts of our society, such as a free press," Nicholas says.

"They view it as anti-China rather than trying to report the news. If they are coming for the gold mountain, though, they still have to get the gold, and at the end of the day I believe this relationship will probably not be that badly damaged, despite the rough ride.

"The Chinese ultimately have the capacity to see things in the long-term perspective of 5000 years of history, in which the present problems will become a mere blip."