Skip to content

Reports - 58. page

On China’s Overseas Investment in 2007

China’s trade surplus took a leap in 2007. According to the State Administration of Foreign Exchange, at the end of 2006, China’s foreign exchange reserve exceeded $1 trillion. In the year of 2007, the figure jumped by over $50 billion every month. By the end of September, the accumulated reserve primarily from trade surplus amounted to $1.43 trillion. At the same time, with the emergence of the global credit crunch at the second half of 2007, domestic macroeconomic imbalance, and shortage of raw materials, the government took active steps to hasten the pace in overseas investment.

The following are excerpts from a Voice of America report on December 30, 2007 [1].

"In the recent several years, China has constantly accelerated its pace in overseas investment. In 2005, China’s overseas investment was $12.3 billion, in 2006, $16.1 billion. As illustrated by statistics from the Wall Street Journal, China’s sovereign wealth fund together with state and private-owned companies has spent $29.2 billion on the purchase of overseas enterprises in 2007, while the amount spent for the purchase of China’s enterprises by all foreign regions was $21.5 billion.

Astounded at the overwhelming impetus of China’s economic expansion into foreign countries, Hong Kong-based Economic Weekly named the year 2007 as the first year of China’s capital outflow. With such pace of progress, said Economic Weekly, China’s overseas capital investment will be comparable to that of Japan within 10 years."

"China’s state-owned petroleum companies continued to purchase energy assets in mid-Asia, Middle East, and Africa through contracts of field exploration, pipeline construction, and refinement projects. The biggest deal was the $4.18 billion buyout of PetroKazakhstan Inc. by China National Petroleum Corporation (CNPC) from a Canadian multinational corporation in October 2007. China’s state-run media regarded the purchase as a breakthrough after a series of setbacks in previous unsuccessful attempts.

Manufacture leads China’s global expansion, accounting for 53.4 percent of the country’s total overseas investment. In early 2007, China’s telecommunication magnate China Mobile spent $284 million acquiring 90 percent of the stock shares of Pakistan mobile carrier Paktel out of a Swedish company. In August, the Shenyang-based Northern Heavy Industries Group successfully acquired and merged Germany’s Wandeor Holding Company and a French company NFM, becoming the controlling owner of the world’s top producers of Tunnel Boring Machine.

The most remarkable waves of overseas mergers and acquisitions (M&A) took place in the financial sector. In July, China Development Bank purchased 7.7 percent of the stock shares of U.K’s Barclays Bank. In October, Industrial and Commercial Bank of China acquired 20 percent of the shares of Standard Bank of South Africa at $42.3 billion, becoming the largest share holder of the largest lender in South Africa.
{mospagebreak}
At the same time, China Minsheng Banking bought 9.9 percent of San Francisco-based UCBH Holdings for nearly $300 million. CITIC Securities Corporation and the Wall Street investment bank Bear Stearns & Co. Inc. each invested $1 billion to each other and became a 50-50 joint venture.

"The newly released ‘World Investment Report’ published by the United Nations stated that China’s overseas investment last year (2006) constituted 2.7 percent of the total global overseas investment, ranking 13. Despite a small percentage, the rate of increase has been an annual average of 60 percent in the past four years. Moreover, the scale of single investment projects is growing sharply. In 2007, the five biggest overseas investments averaged $3.1 billion, while the size of foreign investment projects in China averaged $202 million."

The following are excerpts from another Voice of America report dated December 29, 2007 [2]

"China has long adopted a traditional and monotonous investment model for its foreign exchange reserve; that is, buying foreign government bonds which has low risk and low return. However, the model underwent a dramatic change since the second half of this year (2007). In March 2007, the preparation of China Investment Limited Corporation was initiated and the corporation was formally established in September. China’s media reported that China Investment Corp, under the State Council, has a registered capital of $200 billion. It is charged with the important task of investing the huge foreign exchange reserve at home and abroad."

"As an investment tool of the Chinese government, China Investment Limited Corporation, just like all other sovereign wealth funds, has received tremendous attention from the international finance circle and governments in western countries.

"David Lampton, director of China studies at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University, believed the investment activities by China Investment Limited Corporation can easily arouse alertness from western countries, due to its nature as a Chinese government agency.

"Because China’s foreign exchange reserve and the newly established China Investment Limited Corporation are controlled by the government, many of the investment activities would be considered to have strategic goals, in addition to commercial motivation. The Chinese government has to deal with the capital meticulously. Whenever the capital is invested in sensitive projects, it would inevitably stir up controversies from the international society."

Endnotes:
[1] Voice of America, December 30, 2007
http://www.voanews.com/chinese/w2007-12-30-voa43.cfm?rss=economy percent20and percent20finance
[2] Voice of America, December 29, 2007
http://www.voanews.com/chinese/w2007-12-29-voa28.cfm?rss=economy percent20and percent20finance

On the Emerging Chinese New People’s Party

Former associate professor of Nanjing Normal University Guo Quan continually published open letters promoting democratic reform in China. As a result, he was expelled from the China Democratic League – one of eight decorative political parties. Soon afterwards, on Decemhber 17, 2007, he was invited to be the acting chairman of the newly established Chinese New People’s Party (CNPP). The CNPP, which is composed mainly of petitioners who have been marginalized in the current Communicst society, claims to have 10 million members. “The purpose of the CNPP is to unite people’s minds, gather the forces of all those who oppose dictatorship, and build a truly democratic China, where people are the masters of their own country,” Guo stated.

The following are excerpts from articles published in overseas Chinese language media, although the official Chinese media has no coverage of this development.

From Voice of America, December 28, 2007 [1]:

"The Chairman of the party and Nanjing scholar Guo Quan claimed that the new party is not a mere decorative party, nor is it a loyal vassal for the Chinese Communist Party (CCP). He said that all of China’s problems originate from the political system. People should have the right to choose the ruling party and to form their own party.

"The new party is called the ‘Chinese New People’s Party (CNPP).’ Guo added that the party was established on December 17. Nanjing Normal University (NNU) punished him and deprived him of his professorship for advocating a multi-party political system in China.

"Guo said, ‘When I told my misfortune to my petitioner friends, they were very angry and said, ‘We should bring together all the petitioner organizations and form our own organization.’ The initial name was the ‘Chinese Petitioners Party,’ or ‘Min Sheng Party’ (A party for people’s livelihood). I said, ‘Those names do not sound  like a party with a political agenda. Let’s call it the Chinese New People’s Party (CNPP).’"

"According to the recently publicized constitution of CCNP, the party currently has 10 million members. Guo said, the main body of the party is petitioners. Presently there are 40 million petitioners in total across the country. More than 10 million of them have contacts with him. Those people are considered the first batch of members. He said, ‘By a rough calculation, among the ten million members, 1/5 of them were CCP members. I suggested to them to renounce their CCP memberships before joining the CNPP. Thus the formal membership should be eight million at the moment. As for the remaiining two million CCP members, they will certainly renounce their CCP membership. Actually they already regard themselves as CNPP members.’
{mospagebreak}
"Guo stated that there would be a cruel crackdown on this kind of party if they sought registration in mainland China or any form of official recognition. Therefore, the CNPP will not seek registration in China, nor require its members to register their membership inside the country. The CNPP will not conduct any political campaigns in any form of a normal political party. However, the party will establish branches in other countries. He added that there will be legally registered CNPP branches in the USA and New Zealand."

From Radio Free Asia, December 28, 2007 [2]:

"After Guo Quan, 39 years old, finished his postdoctoral research at NNU in 2001, he stayed at the university to teach. He is an associate professor of literature, and a supervisor for graduate students in the Masters program. In June 2001, he joined the China Democratic League (CDL), one of the eight parties that collaborated with the CCP during the civil war before 1949. After the CCP seized power, Mao Zedong asked not to dismiss these parties and asked them to monitor the CCP as participating political parties. However, in their constitutions, all eight parties declared that they accept the CCP’s leadership. Thus they are regarded as the ‘democratic vassals of the CCP.’"

"After he published multiple open letters to state leaders, NNU’s CCP committee deprived Guo Quan of his teaching duties and demoted him to the position of librarian. Local authorities raided his home and detained him for 12 hours. Last Friday, he received an official letter from NNU’s CDL committee, expelling him from the league for ‘advocating a multi-party political system, severely violating China’s constitution and CDL charters, and creating a bad political influence domestically and internationally.’ In response, Guo said that he does not regret being expelled from CDL, which showed its nature throughout the incident. He believed that it was another round of the authorities persecuting him. He said, ‘The actions of the CDL prove that it is not a democratic party; the authorities’ persecution of me just proves that there is no democracy in China, and my perspective of democratic reform is correct.’"

Part of CNPP’s constitution published in Boxun, on December 24 [3]:

"The CNPP aims to adopt a welfare-for-all economic policy, in which society’s wealth, except for the parts used for national security and public construction, should be distributed to the people according to their work. The CNPP aims to adopt a multi-party electoral political policy, in which people have their endowed right to choose the ruling party. The CNPP will do its best to help them to achieve this right.

"The CNPP is willing to accept the people’s choice, and will stand by the Chinese people to guard this universal value and social ideology of freedom and democracy. The CNPP will strive to construct a China that has a multi-party democratic political system with welfare for all.
{mospagebreak}
"The short-term goal is to spread the democratic ideology and urge the current government to abandon media censorship and the one-party system.

"The ultimate goal is to achieve democratic politics in which people can freely form their own parties and elect the ruling party.

From the Epoch Times, December 18, 2007 [4]:

"After the 17th National Congress of the CCP, Chinese intellectuals started a wave of writing open letters to state leaders. Following the letters by Wang Zhaojun, a member of the  standing committee of the Chinese People’s Political Consultative Conference of Anhui Province, and entrepreneur Zheng Cunzhu, on November 14, Guo Quan publicized his open letter to Hu Jingtao and Wu Bangguo, urging the construction of a multi-party democratic political system under the principle of "welfare for all."

"Immediately afterwards, Guo wrote a second open letter to Wen Jiabao regarding the rights of the 590,000 workers that PetroChina and Sinopec fired, and the issue of China’s ‘labor through reeducation system.’ In a third letter, he wrote on behalf of the 138,000 employees of the Industrial and Commercial Bank of China. On December 15, he wrote his fourth letter to the state leaders concerning the People’s Liberation Army (PLA) veterans across the country and the issue of nationalization of the armed forces.

"He stated that CNPP is a fully open democratic party. Any person can claim him or herself to be a member of the CNPP as long as he or she is for democracy, regardless of religion and social class, or whether they are members of other democratic parties. However, Guo emphasized that CCP members can join CNPP only after they renounce their CCP membership. ‘Many CCP members owe people a blood debt. They are doomed to be tried by the people and by history. They can not be members of CNPP.’"

Endnotes:
[1] Voice of America, December 28, 2007
http://voanews.com/chinese/w2007-12-28-voa28.cfm
[2]Radio Free Asia, December 28, 2007
http://www.rfa.org/cantonese/xinwen/2007/12/18/China-Professor/
[3]Boxun, December 24
http://www.peacehall.com/news/gb/party/2007/12/200712241223.shtml
[4] Epoch Times, December 18, 2007
http://www.epochtimes.com/gb/7/12/18/n1946000.htm

Free High Quality Images Download Free Stock Images Download Free Images Free Stock Photos & Images Beautiful Free Stock Photos (CC0) Free stock photos