July 23, 2012
China is taking a historic step toward its ambition to become a global resources powerhouse with a $15.1-billion (U.S.) bid to buy Calgary-based oil producer Nexen Inc.
The bid by state-backed CNOOC Ltd. is the largest by a Chinese firm for a foreign company, and confirms that Canada has become a proving ground for China's rise in the global economic order as it deploys some of its trillions of dollars in foreign reserves to secure strategic resource properties around the world.
China has been largely responsible for a global commodities boom that started over a decade ago when it went to international markets to acquire materials needed for massive industrialization of its economy, including oil and gas, copper, metallurgical coal and iron ore. At the same time the giant Asian economy began encouraging its large resource companies to become producers instead of just buyers of strategic materials.
"They are trying to secure access to resources on a long-term basis," said Michael Amm, a China specialist at Torys who thinks China is still in the early stages of its commodities buying spree.
We're certainly in the middle of the beginning."
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