Telegraph UK:

A conference of officials from the National Energy Administration has agreed to consider establishing a special fund for China’s state-owned companies to buy oil and gas firms overseas. The beneficiaries would be the Beijing’s three giant energy companies – Petrochina, Sinopec and CNOOC.

"Firms will be able to benefit from low-interest loans and, in some cases, direct capital injections," according to China Petroleum Daily.

This state money would be used to fund takeovers or mergers with resource companies abroad. Which foreign firms, if any, have been identified for takeover has not been disclosed. But the dramatic fall in oil prices since last summer, and the strains caused by recession, have driven down the share prices of many energy companies, making them more affordable targets for predatory competitors.

Jiang Jemin, the chairman of Petrochina, recently remarked that the "low share prices of some global resource companies provide us with fresh opportunities".

The possibility of a Chinese state subsidy for overseas acquisitions may ring alarm bells in Western economies. Four years ago, CNOOC tried to buy an American oil company, Unocal, and succeeded in outbidding its main US rival. But the Chinese firm eventually withdrew its offer amid opposition from American Congressmen. They opposed the idea of a private US firm falling into the lap of a state-owned company, bankrolled by the Chinese Communist Party.

My comment: The rich get richer so to speak. The Chinese have a long term perspective and the cash. That is why the balance of economic power will shift towards them over the next decades.

John Polomny
The Real Deal