Tuesday, July 21, 2009
China Sells Dollars-3
"China again sought to satisfy its hunger for natural resources, as state-owned Sinopec Group, agreed to acquire oil-exploration company Addax Petroleum Corp. for 8.27 billion Canadian dollars (US$7.19 billion), in what would mark the largest oveseas takeover by a Chinese company. ... The transaction also underscores the growing appetite for risk among Chinese resource companies. ... But in the past year, Chinese state-owned companies have been encouraged to make acquisitions by a central government convinced that the global financial crisis has created an unmatched buying opportunity", my emphasis, Guy Chazan and Shai Oster at the WSJ, 25 June 2009, link: http://online.wsj.com/article/SB124584068908746803.html.
China's dollar-selling spree continues. I disagree that the "transaction also underscores the growing appetite for risk among Chinese resource companies". It's the opposite. These companies see resources in the ground as less risky over the long-run than holding US dollars. So do I.