In yet another blinding piece of evidence that Chinese investment in Australia is too risky, Reuters have reported that Yancoal’s owner bought part of their own bank.
Can an Aussie family wanting a home or car loan just buy their local Bendigo Bank branch? No.
In the shocking revelation, Yanzhou Coal who controls Yancoal spent $254 million on buying part of China Zheshang Bank who lend to big businesses.
Yancoal wants to buy mines in the Hunter Valley and a significant stake in Newcastle Port.
Why is this a bad thing for Australia? Reuters said it best:
“One danger is that banks lend to their corporate shareholders on more lenient terms than to regular borrowers, regardless of credit risks.”
Yancoal has debts of $6 billion and Yanzhou has debts of $7 billion – no bank would lend to any Hunter household or business with that level of debt. No bank should lend to a company who cannot control their own debt.
Households know that when you have a debt, you need to pay it by reducing your costs. Yancoal will do the same, but the costs they’ll cut could be wages or jobs in their mines or at Newcastle Port.
We need our representatives like Joel Fitzgibbon, Sharon Claydon, Brian Burston and the Treasurer Scott Morrison and Prime Minister Turnbull to act to stop this travesty.
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