China will use its foreign exchange reserves to make more overseas acquisitions, the country’s premier Wen Jiabao said in an interview.
Wen told diplomats he wanted China to hasten its ‘going out’ strategy, which refers to big investments and acquisitions overseas. Although China has made many big acquisitions in recent months, HSBC’s chief China economist Qu Hongbin said this was the “first official articulation” of a policy to directly support Chinese companies make foreign acquisitions.
In case you were wondering what role commodities would play in this:
In an interview published in state-controlled media, the chairman of China Development Bank said Chinese outbound investment would accelerate but should focus on resource-rich developing economies.
“Everyone is saying we should go to the western markets to scoop up [underpriced assets],” said Chen Yuan. “I think we should not go to America’s Wall Street, but should look more to places with natural and energy resources.”
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