China begins to flex its finncial muscle ..
Whilst Arabs usually make headline news, the Chinese are quietly making acquisitions.
the question is that will this lead to protectionist moves on the part of the West ?
China is pouring another $7bn (£4.4bn) into Brazil's oil industry, reigniting fears of a global "land grab" of natural resources.
State-owned Sinopec clinched the deal with Spain's Repsol yesterday to buy 40 per cent of its Brazilian business, giving China's largest oil company access to Repsol Brasil's estimated reserves of 1.2 billion barrels of oil and gas.
The whopping price tag for Repsol Brasil – which values the company at nearly twice previous estimates – is a sign of China's willingness to pay whatever it takes to lock in its future energy supplies and avoid social unrest. It will give the company enough cash to develop all its current oil projects, including two fields in the Santos Basin.
The Repsol deal is not China's first in Brazil. In February last year, Sinopec stumped up a $10bn loan to Petrobras, the state-owned oil company, in return for guaranteed supplies of 10,000 barrels of oil every day for the next 10 years.
It also follows a slew of similar deals across the world. While much of the developed world is baulking at its debts in the aftermath of the financial crisis, China has continued a global spending spree of unprecedented proportions, snapping up everything from oil and gas reserves to mining concessions to agricultural land, with vast reserves of US dollars.
This year alone, Chinese companies have laid out billions of dollars buying up stakes in Canada's oil sands, a Guinean iron ore mine, oil fields in Angola and Uganda, an Argentinian oil company and a major Australian coal-bed methane gas company.
"China is rich in people but short of resources, and it wants to have stable supplies of its own rather than having to buy on the open market," Jonathan Fenby, China expert and director of research group Trusted Resources, said.
But it is a strategy causing anxiety elsewhere in the world. Rumours in recent weeks that China's Sinochem may make a bid for Canada's Potash Corporation raised fears that the Middle Kingdom would corner the global market for fertiliser.
Similarly, when BP's share price plummeted after Barack Obama's criticisms in the wake of the Gulf of Mexico oil spill, there was concern that the company would be driven into the hands of the Chinese.
More explicitly still, when the aluminium giant Chinalco was trying to buy Anglo-Australian Rio Tinto last year, television ads protesting against the scheme from no less than the Senate opposition leader bellowed "Keep Australia Australian".
Source: The Independent
regarding China getting an unfair advantage:
I guess they'll just be bringing democracy on the back of Chinese "finance/investment" to "liberate" people from tyrants
probably much cheaper than tanks and armies
Yes they are.
many governments feel that allowing China to own it's companies may allow it to get an unfair advantage in the future.
this ofcourse goes completely against the tenet of free market trade and economics.
As we all know China is rich in people but short of natural resources has to use its mighty financial capability to sustain its growth. As its economy continues to grow, many chinese are now in a middle class having ability to have cars and so to demand more fuel, oil or gas is very rapid. In return chinese government is doing good for its people and glory of its country and shall I say a dominance in the world in terms of acquisitions. And It seems this will unbalance the world.
By the way, are western goverments trying to prevent China from getting out of these acquisitions and to go back in equilibrium?
and the most important thing, till now they didn't show their interest in military acquisition, unlike the rest of developed nations.
making it prints in the international scene in a very unnatural way, not militarily but in finance! And the big nations really need to "worry"!
Oil field in Uganda? bullocks.
China has their strong interest and billions of investment in Sudan. Uganda has no oil I guess.
For some reason we feel "threatened" by Chinese acquisitions. the worrying thing is that it may lead to isolationsim on the part of many western governments.
on China. Four years ago when I was in their land, the strong presence of China in the African Continent is also very noticeable and even then, the prospect of seeing China's presence in all major developing countries should have given the rich nations a glimpse of what's coming!