China's Investment in Commodities
This entry was posted on 7/22/2009 4:02 PM and is filed under uncategorized.
China is acting like a huge uncoordinated
hedge fund. They drive up the price of commodities with stockpiling and a
stimulus package and then go out and buy companies producing those commodities
at prices they elevated.
They also should take lessons from
their own actions. Let us say they buy some commodities company in an emerging
market, like Sudan. Corporations are still only pieces of paper in a records
office. If the government of Sudan decides to arrest Chinese employees on spying
charges levy a huge tax or make charges about environmental violations, there is
little the Chinese government can do about it. (see also BP, Telenor, Akea
etc.)
