Friday, March 02, 2007
Iran, Sudan and Nigeria taken off China investment incentive list
By Richard McGregor in Beijing
Friday, March 02, 2007
China has left Iran, Sudan, and Nigeria off its latest list of resource-rich countries for which it will provide financial incentives to Chinese companies to invest in.
The National Development and Reform Commission, the chief economic planning agency that also oversees energy policy, released the new list on its website yesterday. The nine nations slated for further Chinese oil and gas investment are Kuwait, Qatar, Oman, Morocco, Libya, Niger, Norway, Ecuador and Bolivia.
It is not clear whether the exclusion of Iran, Sudan and Nigeria came because Chinese companies already have short-term investments plans in the three countries, or for more political reasons.
China is under pressure from both the US and the European Union to stay out of, or use its leverage in, Iran and Sudan to change the policies of both countries, on nuclear issues and human rights respectively.
Iran was China's largest supplier of crude oil in January, according to figures released yesterday. Angola, previously the largest, was second and Saudi Arabia third.
China already has investments in some of the nine countries on yesterday's list but the offer of incentives for further or new investments underlines Beijing's determination to acquire further energy assets overseas.
China draws 80-90 per cent of its own primary energy needs from domestic supplies, mainly through its abundant coal resources. But it has a large and rapidly growing bill for oil imports and also raw materials such as copper, nickel and bauxite.
In purchasing foreign oil concessions and mines and the like, China is in effect buying the production of those fields directly for its own use, not to be sold on the global market.
The incentives offered by the government include tax breaks and soft loans from China's large state-owned development banks.
Besides the energy industry, the incentives are also available for investment in sectors such as plastics, food processing, machinery, textiles and timber. China is also encouraging investment overseas to reduce its swelling $1,000bn-plus in foreign exchange reserves.
Wen Jiabao, the premier, said in a speech last month, but only released yesterday, that government would offer “increased financial support” for firms investing overseas
Copyright The Financial Times Limited 2007 ¶ 1:25 AM
Friday, March 02, 2007
China has left Iran, Sudan, and Nigeria off its latest list of resource-rich countries for which it will provide financial incentives to Chinese companies to invest in.
The National Development and Reform Commission, the chief economic planning agency that also oversees energy policy, released the new list on its website yesterday. The nine nations slated for further Chinese oil and gas investment are Kuwait, Qatar, Oman, Morocco, Libya, Niger, Norway, Ecuador and Bolivia.
It is not clear whether the exclusion of Iran, Sudan and Nigeria came because Chinese companies already have short-term investments plans in the three countries, or for more political reasons.
China is under pressure from both the US and the European Union to stay out of, or use its leverage in, Iran and Sudan to change the policies of both countries, on nuclear issues and human rights respectively.
Iran was China's largest supplier of crude oil in January, according to figures released yesterday. Angola, previously the largest, was second and Saudi Arabia third.
China already has investments in some of the nine countries on yesterday's list but the offer of incentives for further or new investments underlines Beijing's determination to acquire further energy assets overseas.
China draws 80-90 per cent of its own primary energy needs from domestic supplies, mainly through its abundant coal resources. But it has a large and rapidly growing bill for oil imports and also raw materials such as copper, nickel and bauxite.
In purchasing foreign oil concessions and mines and the like, China is in effect buying the production of those fields directly for its own use, not to be sold on the global market.
The incentives offered by the government include tax breaks and soft loans from China's large state-owned development banks.
Besides the energy industry, the incentives are also available for investment in sectors such as plastics, food processing, machinery, textiles and timber. China is also encouraging investment overseas to reduce its swelling $1,000bn-plus in foreign exchange reserves.
Wen Jiabao, the premier, said in a speech last month, but only released yesterday, that government would offer “increased financial support” for firms investing overseas
Copyright The Financial Times Limited 2007 ¶ 1:25 AM
