Chinese Leaders Jet-Setting The World on Buying Spree
While other world leaders are staying home plagued with solving their economic crisis, the Chinese leaders Hu Jintao (President), Xi Jinping (Vice President and Wen Jiabao (Premier) were jet setting the world on buying spree. What does this mean? Like top sales corporate executives sourcing out world products & markets, they are doing the same.
President Hu Jintao
Though China’s stimulus package is worth a whopping four trillion Yuan over two years, it has abundant cash reserves after years of double digit economic boom. To say the least, China is in a better shape by far than any other economies & facing no worse than a slowing down in its
economy. Time is opportune for China to
be buying resources at present low prices, renewing & establishing new contacts . . . making investments that will ensure further impetus to the Chinese power house.
(Premier Wen Jiabao >)
Vice-President Xi Jinping
Their recent buying spree includes . . .
A $19.5 billion investment in resource conglomerate Rio Tinto by Aluminum Corp of China, financed by the China Development Bank.
China Petrochemical’s $1.5 billion purchase of Canada’s Tanganyika Oil operating in Syria.
A $25 billion loan to the Russian government in exchange for 290,000 barrels of oil per day for the next 25 years and a pipeline to China to carry the oil.
A $10 billion loan to Brazil securing up to 160,000 barrels of crude a day.
A deal with Venezuela for up to 1 million barrels of oil per day by 2015 in return for another $4 billion to top off an existing development fund.
A $1.7 billion bid by China Minmetals for OZ Minerals, an Australian zinc producer on the verge of bankruptcy.
All these, while assuring its supply chain, will contribute positively to further the growth of the Chinese economy. Logic will tell you that you can’t keep on spending money which you don’t have & get deeper into debts. But if you have $2 trillion cash reserves, then it’s a wise move indeed.
Now you can see why China is booming while others are groaning & going under in this economic trough. The tens of thousands of factories closing in China & the millions of Chinese out of work bear little numerical consequences in a country as huge as China. Its economic gear is in place, bank lending is soaring, up an amazing 101% to the tune of $237 billion, with 35% of all lending in January going towards infrastructure projects including power grid, railways & nuclear plants.
Other economic scenario is also encouraging: retail sales continue to explode higher, up a whopping 24.5%, from clothing sales to electronics & luxury items. For January, Mercedes Benz saw sales of its S-Class models jump an impressive 26% in China.
China is led by a good team of leaders. They are making sure their power house engine is matching up with the superb performance of the classed Mercedes engine & Rolls Royce.
Metaphorically speaking, the sun rises in the East & sets in the West. It looks like China, despite all the doom & gloom, is climbing up in the right direction.
A Chinese by Descent
An Australian by Consent
Friday, 27 February 2009