China's record investment in a foreign firm has underlined the nation's drive to get more control over the natural resources that have helped fuel its rapid rise, analysts say. State-owned aluminium firm Chinalco said last week it was putting 19.5 billion dollars into troubled Anglo-Australian mining giant Rio Tinto - the most money China has ever invested in an overseas company.
For Rio, the deal provides cash to help pay off its vast debt load.
But for China, analysts say, the long-term strategic goal is to get more leverage over the essential materials - like iron ore, a vital resource for making steel - that have allowed the country's stunning rise.
Wang Jianhua, vice-director of Mysteel Research in Shanghai, put it simply: "China has money and needs resources."
Before the global economic downturn, China's virtually unquenchable demand for mineral resources helped push up commodities prices. Now amid the slowdown, Beijing could be looking to take advantage while prices are lower. "It may want to grap the chance to acquire some (overseas) assets when international asset prices are relatively cheap," said Chen Qing of Beijing investment bank Core Pacific-Yamaichi.
China imports an estimated 60 to 70 percent of its copper and the country's steelmakers last year accounted for 38 percent of world production, according to the World Steel Association. In 2008, they were forced to pay suppliers BHP Billiton and Rio Tinto at least 80 percent more than the previous year. "Our objectives are to seek commodity and geographic diversification with a view to achieving long-term financial returns from our investments," said Chinalco President Xiao Yaqing in announcing the deal.