China admitted on Wednesday that the $US38.5 billion or $A41 billion proposed takeover bid of Australian giant mining firm BHP Billiton Ltd (ASX: BHP) for Canadian fertiliser maker Potash Corporation of Saskatchewan has elicited considerable attention from the Chinese government.

Industry watchers said that Beijing may be reluctant to see the prospect of a single company such as BHP Billiton dominating its commodity needs as Commerce Ministry spokesman Yao Jian said that his ministry is closely monitoring the development of the deal, noting that "China is highly reliant on potash imports."

At present, BHP Billiton is a major player in the iron ore supply needs of China for its steelmaking industry and it would inevitable for Beijing to be concerned on how the deal would transpire as Mr Yao stressed that "this is attracting attention from the world potash industry and also from Chinese industry."

The commerce ministry also dispelled talks that China has officially transmitted its concerns on the deal to the Canadian government as he echoed the Commerce Ministry's official stance that Beijing "has had no official contact with them."

He said though that China's anti-monopoly regulator is duty-bound to look deeper on a proposal should a formal application is received since Potash presently maintains a 22 percent interest in Sinofert Holdings Ltd, which is the country's biggest potash producer and fertiliser importer.

Earlier this month, a major Canadian pension fund revealed that a Chinese investment fund is mulling a joint takeover bid for the giant fertiliser producer but Mr Yao refused to make any comments on speculations that Sinofert was a party to the emerging rival bid for Potash.