China consolidates its Latin American presence
Recent large-scale Chinese acquisitions and consortium agreements in the LatAm financial and energy sectors indicate the People’s Republic’s continuing interest in the region’s resources.
China Construction Bank’s agreement to buy a controlling stake in Brazil’s Banco Industrial e Commercial (BicBanco) for $730 million is a landmark deal in cooperation between the two Bric countries.
It is CCB’s first acquisition in Latin America, giving the Chinese state-owned bank a foothold at a time when Chinese companies from the financial sector and beyond are looking at opportunities to expand into the region.
It is also an encouraging first statement of intent by a state-owned company from China after the much-watched Third Plenum of the Chinese Communist Party’s central committee. The deal is subject to regulatory approval, which is widely expected to be granted.
Third Plenums refer to the third time new leaders of China lead a plenary session of the central committee. They generally take place about a year after a new administration assumes office. Previous Third Plenums have had a substantial impact on China’s development since the mid-1970s.
China’s premier, Li Keqiang, admitted recently in public remarks that China’s economy was at a crucial stage of restructuring and stressed that the country would improve relations with overseas firms and that multinational corporations would receive the same treatment as state-owned enterprises.