Horasis:The Global Visions Community Horasis China and business Asian business Asian business globalization systemic risk sustainability management consulting Asian trade globe visions leadership skills scenario-building World Economic Forum Frank-Jürgen Richter Frank-Jurgen Richter Frank-Juergen Richter Frank Richter
      Home Site Map Email
Home
Philosophy
Management
Events
Contact
All press releases
2016
The Free Press Journal
India's Frank Friend
Inaugural Horasis Asia Meeting to bring CEOs together in Bangkok, scheduled for Nov 27-28
EU economy will suffer from terrorist attacks, but investment from China won’t stop
Premier assures stable yuan
2015
There is a Need to Out-guess the Economy a Long Time into the Future
Collaborative approaches to sustainable growth
Enacting visions for a sustainable future
For investors, information on laws, regulations quite important
Frank-Jürgen Richter: Li's Davos speech gives a clear outline of China's future
Jaipur - Voices from CII
'Sanctions always hurt wrong person,' open dialogue needed
 
2014
A German Expert’s Global Vision on China
Economic Reforms in China: which model of development?
 
2013
China’s New Role in the Global Arena
Horasis Announces Global India Business Meeting 2014
Vision For The Future
 
2012
Outbound express
Ras Al Khaimah to host global Arab Business Meeting in Dec
Chengdu ‘could be Silk Road hub’
Fruitful coalition
Old model of capitalism is ‘coming to an end’
We believe the profits to be genuine
We believe the profits to be genuine
Ray of hope for African FDI?
No PIIGS in Asia
Decoding the Euro Crisis
Where To, The Euro Zone?
Economic Outlook 2012
 
2011
The Big Fall
Compromise is good for politics
The EU problem hurts China more than India
Even the Tatas are not full-fledged brands overseas: Richter
The European Crisis Is An Opportunity For India
Europe Has A Superiority Syndrome
India is no longer decoupled
Interview with CNBC
Global India Business Meeting
What's the world coming to?
Global Russia Business Meeting 2011
100 Global Leaders
 
2010
Asean Affairs China in Spotlight
Emerging Markets to the Fore
Global India Business Meeting to take part in Madrid
Dialogue with Dr Mahathir
Global Arab Business Meeting
 
2009
Patriarch Kirill
Trade Protectionism
Business Leaders of the Year
Spotlight on Macau
Global China Business Meeting
Tamil Nadu
India: Enthusiasm and Concern
Indian Business Leaders
Minister Anand Sharma
Emerging Markets Investors Roundtable
 
2008
Bargains for China
Global China Business Meeting
Global India Business Meeting
Responsibility to the Future
To Brazil, to Gold
China Meeting 2008
 
2007
China and Energy
Business Leader of the Year
China and Africa
Jean-Claude Trichet
Global Bailout
IHT
China Meeting
China-Europe Connector
Source Code China
China Meeting in Frankfurt
Meeting with José Socrates
2006
Connecting China & Europe
IHT, 9/06
China Meeting in Geneva
High-Level Meeting
Dato' Sri Najib Tun Razak
Managing Global Challenges
Six Billion Minds
2005
China's energy needs
China meeting in Geneva
From Local to Global
Global Outsourcing Report
Release of 'Global Future'
Media Industry's Future
China's Rise - Europe's Fall!
Jagdish Bhagwati, 8/05
Jagdish Bhagwati, 7/05
Dinner on Globalization
 
Crisis could mean bargains for China

By PAUL HAVEN, Associated Press, November 18, 2008

 

CBARCELONA, Spain — Chinese companies are shopping for companies in Europe and around the world, undeterred by the global financial crisis. In fact, they are hunting for bargains.

Analysts and business leaders say the economic meltdown that has pummelled global stock markets may be bad news for the West, but it could be a boon to Chinese companies flush with cash and looking for places to put it — despite being burned on earlier investments.

"Business people from China have quite a high level of confidence that we will recover from the impact, and they see more opportunities through this crisis," said Fu Chengyu , chairman of China's third largest state-owned oil company, CNOOC Ltd. "We feel more confident than we did six months ago, but this all depends on how we manage this opportunity ... We are looking forward to the next six months."

The optimism comes despite fears that China 's economy is slowing, and that the government will be less enthusiastic about big Chinese companies sending investment overseas.

Cheap prices, low interest rates and China 's insatiable appetite for raw materials are all likely to keep Chinese pocketbooks open, good news for capital-hungry Western companies that have seen their profits dwindle and their access to credit tighten.

"Cash is king, and China has a lot of cash, and the whole world is for sale at a discount," said Charles Tang , the chairman of the Brazil-China chamber of commerce. " China should wait a few more months and then go on a shopping spree, to secure what it needs at a super discount."

Where trade restrictions once prevented some high profile deals from getting done, some see progress.

"Things are changing," said Frank-Jürgen Richter , president of Horasis , a Geneva , Switzerland-based group that organized the Global Chinese Business Meeting, a conference here bringing Chinese and global business leaders together. "The U.S. and Europe realize that they need Chinese investment" to help ward off a recession.

Chinese companies invested $34.16 billion overseas in the first half of 2008, including $25.66 billion in non-financial institutions. That last figure represents a 229 percent increase over the same period in 2007, according to Chinese government figures.

With their balance sheets loaded with cash, and with interest rates falling, many believe the upward investment trend will continue, despite the risks.

The Chinese financial system has avoided the turmoil that has paralyzed Western markets, thanks to far stricter regulations. And the Chinese economy, while slowed considerable by the global downturn, is still expected to grow at an enviable 8 percent rate in 2009, helped in part by a $586 billion government stimulus package announced earlier this month.

Most Chinese investment overseas has so far focused on the banking and oil sectors.

In August, China 's largest offshore oil-services provider, China Oilfield Services, announced it was buying Norway 's Awilco Offshore in a deal valued at $2.5 billion. And in March, the Industrial & Commercial Bank of China Ltd. finalized the US$5 billion purchase of a 20 percent stake in South Africa 's Standard bank, the biggest overseas investment ever by a Chinese investment institution.

China has also invested heavily elsewhere in Africa and in Latin America, with Aluminum Corp. of China investing more than US$2 billion in a copper mountain in Peru, and others snapping up stakes in mining, commercial farming and construction in Congo, Zimbabwe and Zambia, among other places.

There are risks as well, particularly for companies flush with cash but short on experience in investing.

Chinese companies have been burned on investment in Western banking and financial companies. China 's Ping An Insurance Co. was the biggest foreign shareholder in Fortis, a Dutch-Belgian bank that got into trouble and had to be taken over by the French and Dutch governments in October. Ping An said recently that it would take a $2.3 billion loss.

But whatever losses Chinese companies have suffered are dwarfed by the amount of cash they still have on hand. Ping An, for instance, still has $100 billion in assets, and can absorb the Fortis losses with relative ease.

Todd Lee, an analyst and head of the Greater China Group at Global Insight, said the government was likely to put the brakes on companies moving too much wealth overseas.

"On the one hand, assets are cheaper overseas, so for Chinese companies that are doing well that does present an opportunity," he said from his Boston office. "On the other hand, the Chinese government is very concerned about growth and the effect the global recession will have on the economy so they don't want to see capital leaving China on a massive scale."

Indeed, Chinese government leaders have warned the country's business community not to leap too soon into a market still searching for the bottom. Li Rongrong, the chairman of the Chinese agency in charge of big state corporations, had blunt words for those licking their chops at the cut-rate prices of overseas companies.

Hold your cash," he said last week, according to the China Daily newspaper. "Don't rush. There will be plenty of opportunities in the future."

 
Fu Chengyu, Chairman and CEO of China National Offshore Oil Corporation (CNOOC), right, and Frank-Jürgen Richter, President of Horaris Switzerland, centre, attend a Opening Plenary during Global China Business Meeting in Barcelona, Spain, Tuesday, Nov. 18, 2008. The head of China's biggest offshore energy producer CNOOC chairman Fu Chengyu, said Tuesday he thinks oil prices are likely to return to the $70-$80 barrel range, though he did not give a timetable and said low prices could continue for some time, during comments made at the conference on Chinese business in this northeastern Spanish city.
 
 
Xu Kuangdi, Vice-Chairman of the National Committee of the Chinese People's Political Consultative attends a Opening Plenary during Global China Business Meeting in Barcelona, Spain, Tuesday, Nov. 18, 2008.
 
 
Spanish Crown Prince Felipe, right, and Xu Kuangdi, Vice-Chairman of the National Committee of the Chinese People's Political Consultative, left, walk before a plenary session during Global China Business Meeting in Barcelona, Spain, Tuesday, Nov. 18, 2008.
 
 
Spanish Crown Prince Felipe, right, and Xu Kuangdi, Vice-Chairman of the National Committee of the Chinese People's Political Consultative, left, attends a a plenary session during Global China Business Meeting in Barcelona, Spain, Tuesday, Nov. 18, 2008.
 

 

 


Horasis is a global visions community committed to enact visions for a sustainable future. (http://www.horasis.org)

For more information, please contact:
 
Communications and Public Affairs
Horasis. The Global Visions Community
phone: +41 79 305 3110
fax: +41 44 214 6502
e-mail: visions@horasis.org
 
 
Copyright © 2005 Horasis Web by Toronto Web Design