Business gets on with it amid Australia-China spat

The sale of part of Shell’s LNG infrastructure at Gladstone shows that business can go on despite political tensions. Picture: Bloomberg

Amid Canberra’s frightening over-reaction to China, business goes on, as shown by talks over the sale of part Shell’s LNG plant in Gladstone.

Shell supplies China and Japan with LNG from Gladstone. China’s CNOC and Tokyo Gas are part owners of 73.75 per cent Shell owned and operated plant.

The sale covers just what is called “common facilities”, which is basically the wharf and some storage, but the 26.25 per cent stake in the facilities will go for around $3bn.

Talks with global infrastructure fund GIP, a or more to the point its Australian fund, are ongoing.

Investors in that local fund include GIC from Singapore and CIC, the Chinese investment fund.

This is global commerce proceeding away from the Canberra noise, which should maybe send some messages to Canberra.

Diplomacy via a loudspeaker rarely works especially if one party is small with little political sway on the global stage.

Australia too, as noted on the weekend, is not exactly a cleanskin in trade when you consider the 37 separate support mechanisms in place for Australian agriculture.

Many Australian business people are mystified about the stance taken by the Morrison government against China which is an important trade partner.

That doesn’t mean Australia has to bow and scrape, but it does mean some careful diplomacy helps.

The motto should be do more and talk less.

China, which owns a big stake in Rio, is working on alternate iron ore supplies like the Guinea Simandou project so may not always be the reliable iron ore buyer that it is today.

This issue would be known to BHP, FMG and others.

In the meantime, the Shell Gladstone talks show business is getting on with business.