China snaps up strategic assets in times of downturn

by israeli.agent | March 17, 2009 at 07:11 am

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Chinese companies have started acquisitions to the tune of USD 16.3 billions during January and February alone. Most of them are in the area of natural resources (Petroleum and other raw materials). A brute majority of these are invested in Australia. Remaining are in Saudi Arabia , Brazil and other oil producing countries.

It is evidend that Western companies are no match for cash rich chinese companies at the time of economical downturn.

Amid sharp decline in global financial flows, cash-rich Chinese companies have snapped up tens of billions of dollars' worth of strategic assets worldwide.

Through dramatically stepped up outbound investment, China has locked up supplies of oil, minerals, metals and other strategic natural resources in Iran, Brazil, Russia, Venezuela, Australia and France in the last few months, the Washington Post newspaper said on Tuesday.

The Chinese media is calling the acquisition spree an opportunity that comes once in a lifetime, and analysts are drawing parallels to 1980s Japan.

"That China started investing or acquiring some overseas mineral resources companies with relatively low prices during the global economic crisis is quite a normal practice. Japan did the same thing in its prime development period, too," Xu Xiangchun, consulting director for Mysteel.com, a market research and analysis firm, was quoted as saying by the Post.