A Wall Street Journal article today titled ‘China Lends Abroad to Ease Oil Deals’ says “China is making a push to lock up energy reserves across the globe by offering much-needed credit to governments, the latest in a $10 billion oil-for-loan deal with Kazakhstan”, that this follows similar deals this year with state oil producers in Russia, Brazil and Venezuela, and that “China’s willingness to extend credit gives its state oil companies a leg up on Western competitors such as Exxon Mobil Corp., Chevron Corp. and BP PLC”. According to the article “China’s government prefers financing acquisitions that give Chinese oil companies direct ownership of resources. But the government extends loans to foreign governments’ national oil companies directly if it gives the Chinese oil companies special access to future exploration projects or provides guaranteed oil supplies, according to bankers who work with the Chinese companies”.

As I see it, this is nothing more than what I consider a predictable increase in China’s world economic influence as it works quickly to employ its U.S.$ holdings into assets it considers strategic to China’s future.

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