Saturday, October 29, 2011

China, the new Bailout King

The Eurozone debt crisis has forced leaders to increase investments in the region, and they are all looking towards China. They are apparently now in talks with China as a potential investor, and trying to sell bonds in their bailout fund as a potential commercial investment.

China has foreign reserve around $3 trillion, so they are more than capable of making investments, but they are not going to make it easy for Eurozone. They would want some concessions. It would be interesting to see what their conditions will be, if they decide to put forward any.

Currently China holds the highest amount of US treasurybonds, around $906 billion as of 2010. If the EU deal goes through, China will hold some clout in that area as well. It’s heartening to see the Asian economies steadilyrallying on.

One small example of China’s move into western business is the takeover of famous western automakers by Chinese companies. Swedish car giant Volvo, which was last owned by Ford Motors, sold it to the Chinese company The Zhejiang Geely Holding Group. The rights for the famous Britishbrand MG is owned by a Chinese company, and the latest models will be all rolled out in China. Even London’s iconic Black Cab parts are now made their. Zhejiang Geely Holding Group have a parts manufacturing joint venture with the Black Cab company Manganese Bronze. The latest news is that the Swedish auto maker Saabhas signed a deal with two Chinese firms to take over the company.

Isn’t it funny how things change? During the 60’s and 70’s, China was part of the axis of evil that was communism. Now the very same people who shunned them have to come knocking on China’s golden doors for favors.

Moral of the story, be nice to the people around you, don’t know when you might need their help. My addition to this is, if you can’t be nice to people, don’t pretend to be their friends just so that you can get some benefits.

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