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Policy advisor urges overseas energy and resource exploration

By Fu Jing (chinadaily.com.cn)
Updated: 2008-12-22 14:20

A senior policy advisor said Chinese enterprises should "become bold" in acquiring and merging overseas high-tech and resource-based enterprises which have faced difficulties amid the worsening financial crisis.

"The financial crisis has resulted in difficulties and contracted assets for such enterprises in the developed countries and this has created a hard-earned opportunity for those Chinese enterprises to expand merger and acquisitions (M&A) overseas," Zheng Xinli, vice-director of the Policy Research Office of the Central Committee of Communist Party of China, said in an article published in Monday's People's Daily.

But Zheng warned that Chinese enterprises should be as cautious as possible in investing financial enterprises, while encouraging "bolder paces" in acquiring and merging overseas assets in non-financial sectors.

Zheng added that China should take this opportunity to remove long existing "development bottlenecks" by expanding M&As of energy and resource-based overseas enterprises. "We should encourage all kinds of enterprises (to invest overseas) and especially, take active actions in energy and resources exploration and development," he said.

China should use its $2-trillion foreign exchange reserve to invest in sectors which can help it remove bottlenecks hindering the country's development, Zheng also suggested.