This was some of the advice handed out at this week’s AMEC [Association of Mining and Exploration Companies] Congress in Perth by Allens Arthur Robinson lawyer Seamus Cornelius, who has spent nearly 18 years working in China.

“You [the industry] really need to overcome your natural tendency of being upfront and don’t lay all of your cards on the table,” he warned.

“The process of negotiation and dealing with the Chinese is an integral part of the whole deal.

“I do encourage you to engage with your Chinese counterparts, but don’t be fooled into thinking that friendship, drinking and nice dinners are any substitute for basic business principles, or that these things will be more important than the pragmatic bottom line.

“Pragmatism is the key and you must be brutally pragmatic.

“The challenge for us now, particularly in Western Australia but Australia generally, is to make the most of the opportunity that China presents.”

As for transparency, Cornelius said the Chinese only used this as a tool to garner more information, but in essence had no belief in the value of transparency.

“So, don’t be transparent,” he said.

The rule of law and the value and importance of an independent judiciary or legal profession is also something completely alien to the country.

Corruption, a subject that attracted international headlines following the Stern Hu case, is also a big issue that he said the government was addressing.

“The government is aware of the scale of the problem and is trying its best to fix it,” Cornelius said.

“But really, there are many, many laws in China but the rule of law and having a lot of law is a completely different beast.

“Judges work for the government, so they are government officials and there is no separation of powers between the judiciary, the legislature and the executive, they are all one.

“The reality of China is that it is extremely grey and there are tens of thousands of different realities.”

The Australian mantra of “giving someone a fair go” is also alien to the Chinese, according to Cornelius, who described the Asian nation as being “intensely competitive”

“They face competition just to get space to walk down the road,” he added.

Adding another angle to the China story was a presentation by UBS Asian investment bank unit head of natural resources Patrick Loftus-Hills.
He said China, which spent a record $US32 billion ($A38 billion) on mining and energy acquisitions last year, was showing signs of slowing its spending spree.
“The financial and strategic investments being made by the Chinese are more subdued right now,” Loftus-Hills said.
“We see them at the moment being very cautious about what they do next.”
Worldwide, he said China had made 10 deals in the past 3.5 years that were greater than $1 billion, with 75% of the deals worth less than $US100 million.
“To put that into perspective, only about 20 per cent of the M&A activity annually in the mining industry has been undertaken by the Chinese, compared to the $570 billion of deals done globally by mining companies in the past three-and-a-half years,” he said.
“But their desire to continue to own commodities, whether they are minerals or oil and gas, is still very strong.
“They’re sitting there, they’re watching, they’re waiting, they’re trying to work out what happens next and what’s the next part of the strategic development of purchasing assets outside of China might be.
“They’re not being hugely aggressive, they’re not being reactive. They’re being careful.”
He said China’s state-owned steelmakers were eager to add to assets to secure material for their steel mills.

“Hunan Valin Steel Co, Baosteel Group Corp and Wuhan Iron & Steel Co are very concerned about where they’re going to get their next tonne from,” Loftus-Hall added.
“They have always been short of concentrate but the situation is becoming very acute for them.
“All of these guys are out there looking for assets for steelmaking raw materials and looking at where investments can be made.
“We’re also starting to see huge construction companies like MCC (China Metallurgical Group Corporation) and others, now investing in minority stakes in development assets in order to win contracts.”