Barnett says mining tax angers China

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China is angry at the federal government over its proposed minerals resource rent tax, according to Western Australian premier Colin Barnett.

Barnett’s insights into China’s opinion of the MRRT come after his return from a two-day visit to the country last week.

During the visit Barnett made the unprecedented step of signing a memorandum of understanding with China’s National Development and Reform Commission.

It is the first time China’s peak economic planning body has signed a trade and investment co-operation deal with an Australian state government.

Barnett told fairfax radio the deal had been struck in part because of China’s frustrations at the federal government over the MRRT.

"I think they’re making a point here … that they understand that WA does not support the mining tax and therefore are getting closer to the WA government in dealing with that and all other issues that affect their trade," he said.

The WA-China agreement covers a broad range of sectors including resources, energy, agriculture, food, and infastructure.

Barnett said the deal was not an effort to go behind Canberra’s back or interfere with foreign relations.

But he said China — the biggest buyer of Australia’s iron ore and coal — was "certainly unhappy" about the federal government taxing the resources.

"China sees that as a tax directed at them, and are extremely resentful about that," he said.

"They certainly are very angry over the mining tax and they raised that repeatedly at the meetings over the last few days."

On Sunday Treasurer Wayne Swan released the second draft of the MRRT and said the tax would help build roads, rail, and other infrastructure, as well as support Australian businesses not “in the fast lane of the mining boom”.

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