China and Australia’s investment relations to brighten in 2010?

Investment relations between China and Australia are on the mend after a rocky year in which Australia blocked a number of Chinese takeovers if the latest agreement is anything to go by. Both countries signed a US$3bn coal deal on Wednesday as Yanzhou Coal Mining Co bought Australia’s Felix Resources. Yanzhou’s vice chairman, Geng Jiahuai, also said the Felix coal deal would act as a “platform for growth” in Australia for Chinese firms.

“Yanzhou’s successful takeover marks a new start in cooperation between Australia and China,” said China’s ambassador to Australia, Zhang Junsai. “China brings not only capabilities, jobs and opportunities, but also secure long-term market share,” Zhang said.

The acquisition is no small-fry and is the largest by a Chinese company in Australia’s mining history and takes a firm place in the year’s top 10 M&A deals.

Bilateral and investment ties were hurt last year when Chinese companies were prevented from acquiring Australian businesses, and by the Chinese detention of an executive from Australian miner Rio Tinto on commercial espionage charges. (Reuters, USA).