Chinese ODI Hits Mexico & Afghanistan (& Rio Tinto)

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The development of Chinese overseas direct investment (ODI) has become a regular feature of the business pages . Everyone knows about the failed investment by CNOOC in Unocal, the purchase of IBM PCs by Lenovo, and the recent headline deals in BG, Blackstone, Barclays, Bear Stearns and Standard Bank (the latter seeming to prove that China’s investments are not simply being picked, alphabetically, out of the business pages!).

China is now clearly looking further afield (Mexico & Afghanistan) – and deeper (more mining):

    • Mexico: LA Times reports that “Mexico’s largest specialty retailer [Grupo Elektra], said this week that it was partnering with [FAW] one of China’s Big Three automakers to build a [US$150 million] plant in central Mexico with capacity to produce 100,000 vehicles a year.”

    • Afghanistan: It is all about copper – and specifically US$2.8 billion of investment relating to the Aynak copper field in Logar Province “the world’s largest undeveloped copper field”. “China Metallurgical Group agreed to invest billions of dollars in the project and related infrastructure development — including the construction of a coal-fired electrical power plant and what would be Afghanistan’s first freight railway.” (Radio Free Europe).

    • Rio Tinto: China Investment Corporation has been linked to a Chinese bid of some US$200 billion bid for Rio Tinto. Did anyone really think they would let that one go without a fight?!

The trends are clear – develop business where Chinese brands can compete in relatively undeveloped and price-sensitive markets (and, some may say, where political influence might be usefully won). Oh, and control the raw materials – wherever they may be.

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2 Responses to “Chinese ODI Hits Mexico & Afghanistan (& Rio Tinto)”

  1. mcvash » Chinese ODI Hits Mexico & Afghanistan (& Rio Tinto) Says:

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  2. Archive » China ODI Update| China Business Blog Says:

    […] China Mobile/Millicom), but there can be little doubt that China has truly arrived on the overseas direct investment (ODI) stage. 2007 saw the launch of the China Investment Corp., the […]

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