Friday, February 20, 2009

Global shift

...But the biggest deals were yet to come. Just after rumors swirled that China Investment Corporation and China Shenhua Energy wanted to take a starter position in a third Australian miner, Fortescue Metals, China unveiled its coup de grace: a 25 billion multi-year deal with Russia. And this time it was not for iron ore, but rather, the master commodity: oil. And they’ve just followed that blockbuster up with a similar deal with Brazil’s Petrobras.

What seems to have escaped wider observation, however, is that deals such as these are a clever way for China to dehoard itself of dollars...

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