Wednesday, April 29, 2009

China the New Mercantilist Power

While American and western powers are attempting money draining projects like nation building, and Global Warming prevention; the Chinese are gobbling up natural resources. Carl Mortished in The Times Online reports on the shopping spree:
This is the moment that China has been waiting for - global financial mayhem, commodity price weakness, governments in disarray and a war chest of $2trillion in foreign currency reserves. Recession has not distracted the officials who manage China's sovereign wealth funds. Half of China's oil is imported and the need will rise to two thirds by 2020. This is the time to buy cheap reserves of oil, gas, copper and iron ore and they are busy scooping up every spare tonne, ounce, barrel within reach.

In February China propped up the finances of Russia's debt-burdened oil exporters with $25billion in loans secured against 20 years of oil exports. China is promised 300,000 barrels per day and included in the deal is a new pipeline that will deliver crude to China's northern refineries. In the same week, China agreed a similar credit-for-oil deal with Brazil under which Petrobras, the Brazilian state oil company, would receive $10billion in loans in return for delivery of up to 100,000 barrels a day to Sinopec and 60,000 barrels per day to PetroChina.
Every day, by increments, the real power of the world shifts to the east.

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