China looking to snap up EU factories, railways
28.11.11 @ 09:32
BRUSSELS - China is looking to buy EU factories and railways instead of wobbly government bonds as prices fall amid the eurozone crisis.
Minister of commerce Chen Deming articulated the strategy at a business congress in China on Monday (28 November).
"Next year, we will send a delegation for promoting trade and investment to the European countries ... 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 process," he said.
Chen's remarks come after the chief of the $410 billion Chinese Investment Corporation, Lou Jiwei, wrote in an op-ed in the Financial Times on Sunday that EU infrastructure needs outside help.
"Traditionally, Chinese involvement in overseas infrastructure projects has been as a contractor only. Now, Chinese investors also see a need to invest in, develop and operate projects," he explained.
Lou praised the UK as "one of the most open economies in the world" and mentioned involvement in a new UK north-south railway project in the context of political hostility to China in some countries.
Chinese port operator Cosco last year bought a 35-year lease for two container terminals in debt-struck Greece. But crisis-hit Iceland last week blocked the sale of a large farm to Chinese businessman Huang Nubo on national security grounds.
Huang said he wanted to build a hotel and a golf course.
Speaking to the Sina Finance news agency, he hit out at what he called European "prejudice ... like the view that state-owned enterprises represent your country, that whatever your background is you're a military business."
"You can come and buy a house, and you can emigrate here and bring your riches with you, or you can buy my luxury goods, but if you want to touch my natural resources, then I'm sorry, I won't let you."
The EU in recent weeks had tried to interest China in buying weak Euroepan bonds instead through a special purpose investment vehicle.
For their part, Chinese analysts predict the spending spree will not begin until prices hit rock bottom.
"The euro zone crisis has not entirely played out and asset prices are very volatile. They haven't found their floor ... Europe is not a resources player, but its manufacturers are what would most interest us, with their market, their technology, and their strong experience," Wang Jun, an economist at the Beijing-based CCIEE think-tank told Reuters.