Last month, mainland Chinese and Australian diplomats and their political masters would have had reason to splutter over their morning coffee or tea. Splashed across the front page of two Australian newspapers were revelations, drawn from confidential diplomatic documents, about a meeting last August between Australian Foreign Minister Alexander Downer and Zhang Guobao, the vice-chairman of the National Development and Reform Commission. The topic - uranium and nuclear power.
Mr Downer told Mr Zhang that Australia might be able to sell uranium to China if it was for peaceful purposes, the report said. They also discussed Sino-Australian free-trade issues and North Korea. But the topic of uranium sales did not appear in any record of the meeting.
Australia has about 40 per cent of the world's known resources of uranium. However, conservation groups and many leaders of one of the two main political parties in Australia, the Labor Party, are opposed to uranium mining.
There are only two producing mines in the country, and all uranium is exported to nations with which Australia has safeguard agreements to prevent it being used for nuclear weapons.
Last year Australia exported about 10,000 tonnes of uranium, 40 per cent of which went to the United States. The Australian government was forced onto its back foot by a possibility thrown up last month that the Chinese might want to mine the uranium themselves by buying existing mining companies, or by applying for mine leases.
Prime Minister John Howard and his deputy, Peter Costello, attempted to quickly put the lid on any explosion of anti-China sentiment. Mr Howard said that if China wanted to explore for, and mine, uranium in Australia, it would have to abide by foreign investment laws and nuclear safeguards rules.
Mr Costello went a step further, and observed that if a state-owned mainland company wanted to set up shop in Australia, then in addition to the foreign investment rules, any investment, 'where it is a sovereign government, [would be] scrutinised even more carefully'.