China Should Reject BHP Bid for Rio, Steelmakers Say

hina, the world's biggest iron ore importer, should reject BHP Billiton Ltd.'s proposed takeover bid for Rio Tinto Group as it would breach fair-trade practices, the China Iron and Steel Association, said.

The Chinese government is reviewing antitrust rules on the takeover bid and the association has expressed its concerns to the Ministry of Commerce, Luo Bingsheng, vice chairman of the group, told reporters in Beijing today.

China's steel mills want to block the merger because the deal would give the world's biggest mining company control of almost half the Asian market for iron ore, the main ingredient in steel. China's economy is already hurting from a fivefold gain in commodity prices since 2002.

Rio fell A$4.22, or 3.4 percent, to A$121.18 at 2:38 p.m. Sydney time on the Australian stock exchange. BHP fell 2.2 percent to A$38.82.

European Union antitrust regulators widened a probe of the BHP plan earlier last month, saying they have ``serious doubts'' about the combination. Rio shares sell for 8.8 percent less than BHP's bid, signaling investor concern the biggest mining acquisition may not succeed.

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