From China Brief (Volume 7, Issue 21):
First, it was the massive accumulation of China’s foreign reserves in Beijing’s wallet, the largest in the world, with $1.4 trillion. A major portion of that money has flowed into the U.S. Treasury bonds, subsidizing much of the Bush administration’s deficit-driven economy. Then, there was the global expansion of large Chinese companies searching for energy and resources to satisfy its hungry growing economy, offset by a failed $18 billion takeover effort of the U.S. energy company Unocal by China National Offshore Oil Corp (CNOOC). Now, China has begun to accelerate and diversify its foreign investment portfolio in a much more confident manner. Last month, CITIC Securities Co. reached an agreement with Bear Sterns Companies to invest $1 billion in each other. This was followed by the announcement that the Industrial and Commercial Bank of China Ltd. (ICBC) will buy 20 percent of South Africa’s Standard Bank Group Ltd. with $5.5 billion in cash. Time has come for China’s financial giants to flex some of their muscles. [Full Text]
Wenran Jiang is an Associate Professor of Political Science and Acting Director of the China Institute at the University of Alberta, Canada.
