China eyes investment delegation to Europe next year: Chen Deming

BEIJING: China's Commerce Minister plans to lead an investment delegation to Europe next year, in hopes that the crisis roiling the continent will open up some plum assets for acquisition.

China has been reluctant to publically commit to buying additional European bonds, despite European pleas for help in shoring up finances there, but could be much more interested in getting hard assets for its cash.

"Next year, we will continue to send a delegation for promoting trade and investment to the European countries," Chen Deming told a gathering of Chinese firms with overseas investments on Monday.

"Some European countries are facing a debt crisis and hope to convert their assets to cash and would like foreign capital to acquire their enterprises. We will be closely watching and pushing forward the progress."

His comments are in keeping with an editorial in the Financial Times this weekend by Lou Jiwei, the head of China Investment Corp (CIC), who wrote that China was keen to make equity investments in Western infrastructure, especially in Britain.

Chen warned that China may fight back if other countries use trade protectionism against it.

Chinese officials repeatedly emphasise the overseas deals that have fallen through because of political opposition; although far more Chinese purchases have cleared with few problems.

China's largest state-owned shipping firm COSCO has already made a major investment into Greece's historic Piraeus port, as part of Greek divestment plans.

Broadly speaking, overseas investment by Chinese state-owned enterprises has so far been primarily geared towards resources purchases, while CIC has been criticised at home for taking equity stakes in Western financial institutions.

CIC was particularly interested in infrastructure projects where governments could offer lower taxes or discounted bank loans in return for investment, Lou wrote in the Financial Times.

China has been colder to pitches to buy more European nations' bonds without getting anything in return. A Spanish delegation was met with polite disinterest from Chinese officials earlier this month, sources said.

The visiting Spanish minister also tried to interest CIC in upcoming divestments of state holdings in savings banks known as cajas, in the national lottery company, airports and other infrastructure.

Commerce Minister Chen cautioned reporters that China itself faces risks of further economic slowdown in 2012.

Annual inflation in 2011 is likely to exceed 5.5 percent -- overshooting the government target of 4 percent -- and inflationary pressures will continue next year, Chen said.