China’s financial clout locks in energy supplies

SHANGHAI – Call it planning ahead.

While China’s exports plunge and millions of laid-off workers hunt for jobs, the country’s big state companies are spending billions of dollars securing access to oil and other scarce resources the country will need in coming decades.


The $25 billion energy agreement signed late Tuesday by China and Russia was the biggest of several deals signed this month, with state financial backing, that are expanding Beijing’s overseas resources base at a time when most banks elsewhere are not lending and most governments are barely scraping by.

“Obviously, now, those are holding cash can speak louder than those who have resources,” said Qiu Xiaofeng, an analyst at China Merchant Securities, in Shanghai.

“The global economic crisis has given China a rare, good opportunity to trade our abundant currency reserves for other countries’ oil resources,” Qiu said.

AP