China eyes to buy European assets

China eyes to buy European assets

BEIJING - Reuters
China eyes to buy European assets

Chen Deming. AP photo

China’s Commerce Minister plans to lead an investment delegation to Europe next year, hoping to pick up some plum assets on the crisis-hit continent.

China has been reluctant to publically commit to buying additional European bonds, despite pleas for help, but could be much more interested in getting hard assets for its cash.

“Next year, we will send a delegation for promoting trade and investment to the European countries,” Chen Deming told a gathering of Chinese firms with overseas investments yesterday. “Some European countries are facing a debt crisis and hope to convert their assets to cash and would like foreign capital to acquire their enterprises. We will be closely watching and pushing forward the progress.”

Chen’s comments were in keeping with an editorial in the Financial Times this weekend by Lou Jiwei, the head of China Investment Corp. (CIC), who wrote that China was keen to make equity investments in Western infrastructure, especially in Britain.

“We are willing to import more products and encourage outbound investment, since the dollar is relatively weak for a long period of time,” Chen said.

But he warned that China may fight back if other countries use trade protectionism to block purchases.

China’s largest state-owned shipping firm COSCO has already made a major investment into Greece’s historic Piraeus port as part of divestment plans.

Overseas investment by Chinese state-owned enterprises has so far been primarily geared towards resources purchases. CIC was criticized at home for some of its early equity stakes in Western financial institutions during the global financial crisis