A voracious appetite for commodities saw China pursue a string of acquisitions in March and April.
China’s typically conservative State Administration of Foreign Exchange (SAFE) seemed to be heralding a new, more aggressive investment strategy when it bought a 1.6% stake worth US$2.8 billion in French oil firm Total.
Not long after, it was announced that SAFE, which manages China’s foreign exchange reserves, had bought just under 1% of British Petroleum for an estimated US$2 billion.
Meanwhile, rumors spread that a Chinese company – perhaps Baoshan Iron and Steel – might buy a 9% stake in Australian miner BHP Billiton. BHP denied the existence of a deal, but shares in the company still spiked in response to the rumors.
Aluminum Corp of China (Chinalco) also entertained talk of buying. After partnering with US firm Alcoa to buy a 9% stake in BHP rival and perennial takeover target Rio Tinto earlier this year, Chinalco said it remained on the lookout for more acquisitions.
Not all attempts have met with success.
Steelmaker Shougang found its bid for a 19.73% stake in Australian miner Mount Gibson Iron blocked in early April by Australian regulators.
The regulators ruled that because a Shougang subsidiary already held shares in Mount Gibson, a new stake would give Shougang too control over the Australian firm.
However, such obstacles are unlikely to hold back other Chinese investors.
China National Petroleum Corp (CNPC) and its listed subsidiary, PetroChina, had two US$20 billion deals with Spanish oil company Repsol YPF fail last year after Repsol backed out. But CNPC and PetroChina are reportedly once again mulling a US$10 billion purchase of some of Repsol’s South American assets and refineries.