Posted on 01/29/2011 11:42:47 AM PST by SeekAndFind
Beijing wants to diversify out of U.S. debt and it will have plenty of cash to make acquisitions.
From 2007 through the first half of this year, Chinese buyers—state, private and in between—acquired 400 companies located outside of the country. The acquisitions span a wide range: mining companies in Australia, Vietnam and South America; oil and gas companies in Africa and the Middle East; banking, financial services and insurance companies in Europe; and electronics, telecommunications and lab testing companies in the U.S. The total cost? $86 billion.
That may sound like a big number, but in fact it's relatively small. The number of companies at play in global cross-border M&A markets during this period exceeded 12,400, with acquisition costs of more than $1.3 trillion. China's share of the total number was 3.2%, and its share of total acquisition value was 6.6%. China ranks sixth in both number of deals and in acquisition value: behind the U.S., U.K., France, Germany and Japan, though just ahead of the United Arab Emirates. Cross-border acquisitions by U.S. investors numbered over 5,000 (42.1% of all transactions), and nearly $400 billion by value (30.1% of aggregate value).
China's acquisitions beyond its borders are also modest compared with foreign investors' acquisitions within China. Currently, China's annual cross-border acquisitions are about half of annual foreign direct investments in the country.
What is significant about China's acquisitions over the past few years is the change they represent from the negligible amounts in the past. Prior to 2007, nearly all China's foreign investments involved buying U.S. debt, along with lesser purchases of euro and yen debt. China currently holds more than $1.6 trillion of U.S. government debt and an additional $1 trillion of non-U.S. government debt and other assets.
(Excerpt) Read more at online.wsj.com ...
Look for Ag companies to move to the head of the line. Followed closely by cargo lines.
RISK
China will buy whatever is at the peak of the market.
Wonder what the real figure is, the treasury department claims less than 1.6 trillion.
Basically the 3.5 min anime-style video (like South Park) protrays the Chinese citizens as rabbits who finally rise up and overthrow their Tiger overlords:
FULL VIDEO: GRISLY CHINESE RABBIT REBELLION
The tigers feed poisoned milk to the rabbit babies, enraging heart-broken parents. Then the "tigers" subject the rabbits to heavy-handed, utopian-themed brain-washing sessions at which they are lit on fire. If they object, the rabbits earn tiger beatings. As pedestrians the rabbits are often struck by crazy-driving, well-heeled tigers.
Finally the rabbits bare their teeth. GOSH I WONDER IF THE CARTOON IS POLITICAL...?
Yes Virginia, The Chinese CAN Dump The Dollar
http://blog.ml-implode.com/2011/01/yes-virginia-the-chinese-can-dump-the-dollar/
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