Red dragon considers landing on hot coal

Implications: 1. Entry through backdoor to the boardrooms of resource companies of Australia. 2. Decision to ensure assured supplies to resource hungry China.

Analysis: China is poaching around the world to channel assured supplies of resources to its ever increasing demand. Australia is rich in resources and is in the midst of a boom. But money is one thing that can bend rules.

Australia as a policy, till now, does not allow state owned banks of a country to directly invest in its companies, citing security concerns. China's state owned banks tried that route. But all that may change when the Rio Tinto investment is accepted. BHP notwithstanding.

Enter the dragon. Chinese investments into Australia have been steadily increasing, though statistics may show they form a miniscule part of foreign investments. And when money talks people listen with interest. Words are cheap. Make moolah while the mine booms.

Oil and coal the least likely candidates to possess magnetic power have suddenly been thrust with those very same powers and are attracting money and attention like never before. All that glitters is now black.

With the flow of investments crossing the great wall, the money may create a boom in the stock markets and the fund managers laughing all the way to bank. Reincarnation of Bear Stearns and Lehman Brothers.