Chillin' out till it needs to be funded
After $28 bln outward FDI in first 5 months of 2010, China continued to grow its global footprint with a 15% share of aussie M&A this year. Even with Chinese bank setting up lines in global destinations and Yuan trade a reality with Brazil, Japan, and many more China’s rising outward investment now hungers for more manufacturing destinations than just exporting cheap chinese items for importing Oil and Gas, Iron, Steel and Copper.
Global M&A activity is yet dictated by access to raw materials and increasingly also cheap labour as China’s own domestic wage environment and
other input costs preclude manufacturing expansion along the coast and inward towns compete with its international partners equally for Capital
Australia alone accounted for nearly $10 bln in 2011 including takeovers of Gloucester Mining and Sundance resources.(WSJ Aus)
Hongkong SAR releases its final GDP figures tomorrow 2011 having grown 5% after a 8% 2010 and a -3.3% 2009. 2012 will be a year for slower growth of 3% on the island and below 8% in the mainland
Chinese investors are also favoring Caterpillar fungus at $11500 a pound (Himalayan Viagra) and baijiu and other local liquors. Local pharmaceutical companies/chains have set up sharespost like exchanges for trading traditional medicines, such as the one set up by Nanjing Pharma. ICBC, the country’s largest bank also set up afund to trade pu’er tea and another bank allows customers to trade diamonds on its site. As far as its global intentions are concerned, China’s new President and now Vice President Xi jinPing is in the “US next month and probably will commit to more that enables trade and investment this year.